Softbank says it has agreed to purchase $8 billion in shares for $5.25 each directly from Sprint, and another $12 billion in shares from existing stockholders for $7.30 per share. Shares of Sprint closed at $5.73 on Friday.
Sprint has approximately 55 million subscribers and is the third-largest mobile phone carrier in the U.S. Combined, the companies would have 96 million users.
News of a potential acquisition first surfaced on Friday.
The deal is a risky one for Softbank. Sprint posted a $1.4 billion loss last quarter, the latest in a series spanning the past five years. The telecom provider has been dwarfed in the U.S. by AT&T and Verizon, each of which are about twice Sprint’s size.
No doubt Sprint and Softbank are hoping that an infusion of cash can help the former build out its LTE network and begin competing again. The deal would also, of course, give Softbank an entry into the American market.
Softbank has partnered and purchased stakes from a number of U.S. technology companies. It was the first mobile provider in Japan to sell Apple’s iPhone in 2007, and acquired 14% of UStream in 2010.
There were rumors last year that Softbank wasplanning to acquire Yahoo, but the deal never followed through. Softbank owns a third of Yahoo Japan.