Sprint offers to buy 49% stake in Clearwire
New York, NY, United States (4E) – Sprint Nextel Corp. plans to acquire the 49 per cent stake in Clearwire Corp. that it still does not own, a move to consolidate the company that plays a key role in Sprint’s ambition to build a nationwide network capable of challenging AT&T Inc. and Verizon Wireless.
In its regulatory filing today, Sprint is offering to buy the remaining shares for $2.90 each. The telecommunication carrier already owns more than 50 per cent of Clearwire.
The deal will involve $2.1bn in cash infusion and would include up to $800mn interim financing to Clearwire. As of September, Clearwire has around $4.2bn in long-term debt.
In October, Japan’s Softbank Corp. provided a cash influx to Sprint by purchasing 70 per cent of the third-largest U.S. carrier for about $20bn.
Clearwire has never managed make a profit, although it has a number of airwaves to its name spanning across the country. That asset could allow Sprint to improve its own network, giving it the ability to handle a surge of traffic produced by handheld devices like tablets and smartphones.
The Clearwire venture was started by Sprint in 2008 with the objective to build a high-speed wireless network that would change the landscape of the telecommunications industry. So far, Clearwire has failed to live up to expectations, and the costs piled up to billions of dollars of losses for the company.