Sprint Nextel Shareholders Approve $21.6 Billion Takeover by Softbank
Published on: 25th Jun 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
Sprint Nextel's shareholders have voted in favour of the planned takeover of the company by Japan's Softbank.
Sprint shareholders overwhelmingly approved the deal, with approximately 98 percent of the votes cast at today's special shareholders meeting voting in favor of the merger agreement, representing approximately 80 percent of Sprint's shares.
"Today is a historic day for our company, and I want to thank our shareholders for approving this transformative merger agreement," said Sprint CEO Dan Hesse. "The transaction with SoftBank should enhance Sprint's long-term value and competitive position by creating a company with greater financial flexibility."
However, the takeover remains subject to approval from the telecoms regulator. Sprint and SoftBank anticipate the merger will be consummated in early July 2013.
If it clears this last regulatory hurdle, then Softbank will end up owning 78 percent of the company, having paid USD21.6 billion for the stake, of which USD16.6 billion is going to the shareholders.
Softbank will be injecting USD5 billion into Sprint to fund its network upgrades, and the combined buying power of the two companies is estimated to lead to annual cost savings of around USD2 billion.
However, while Softbank uses Huawei equipment in Japan, it has promised not to use the Chinese vendors equipment in the USA -- which would limit some of the cost savings they could have expected.
The approval is also good news for Clearwire's minority shareholders as Sprint's offer to buy them out was conditional on the Softbank takeover going ahead.