Sprint Proposes $2.1 Billion Buyout of Clearwire
Sprint filed paperwork with the SEC proposing a $2.1 billion buyout of Clearwire that will finally give it control over major spectrum.Sprint is reaching into Softbank's deep pockets to officially advance its 4G efforts and more aggressively compete against rivals Verizon Wireless and AT&T, and even smaller carrier T-Mobile, which will soon be emboldened by its acquisition of MetroPCS. As rumors anticipated, on Dec. 12 Sprint filed paperwork with the Securities and Exchange Commission, sharing plans to purchase the 49 percent of Clearwire that it doesn't already own for $2.90 a share, or $2.1 billion. In October, Sprint sold 70 percent of the carrier to Japan-based Softbank for $12.1 billion. Days later, flush with spending money, it purchased additional shares of Clearwire from co-founder Craig McCaw. The purchase gave Sprint a majority portion, but still not the ability to control the spectrum-rich company as it might have liked—and as full ownership will. According to the Clearwire site, it has "more spectrum than anyone." The Wall Street Journal described the full purchase of Clearwire as enabling Sprint to "clear up a tangled ownership structure" that has prevented Sprint from having control over key decisions at its major partner. The "dysfunctional relationship" between the two, and need for access to Clearwire's significant spectrum holdings it added, had become notable issues in its deal with Softbank.
Announcing Sprint's agreement with Softbank Oct. 15, Sprint CEO Dan Hesse said in statement that he and his team were "excited to work with Softbank to learn from their successful deployment of LTE in Japan as we build out our advanced LTE network, improve the customer experience and continue the turnaround of our operations."