SoftBank buys Sprint: everything you need to know about the multi-billion acquisition

Sprint Nextel is no more. Japan's SoftBank completed its protracted takeover of the US's third largest mobile carrier today, giving it a controlling stake in what is now Sprint Corporation. The deal is worth $21.6 billion, including $5 billion in cash to boost the company's balance sheet and $16.6 billion to be distributed to Sprint shareholders.

The name change removes an albatross that had long hung around Sprint's neck following its $36 billion acquisition of Nextel in 2005. After failing to successfully integrate the two networks, Sprint wrote off $29.7 billion on the purchase in 2008, wiping out over 80 percent of Nextel's value. Nextel's iDEN push-to-talk network was shut down at the end of last month.

Sprint just announced that it has successfully completed its purchase of Clearwire — its final, best offer of $5 per share was accepted, and the transaction has been closed as of today. This comes just one day after SoftBank and Sprint announced their merger would be complete on July 10th and less than a week since the FCC gave both deals its blessing. Sprint was already a majority shareholder in Clearwire, but now the carrier — and thus Sprint's new owner, SoftBank — now owns 100 percent of the company. It's a key acquisition for Sprint, as the carrier plans to use Clearwire's spectrum to continue building out its LTE network.

This week's news also makes two of Dish's planned acquisitions official failures — the company had hoped to purchase both Sprint and Clearwire, and submitted aggressive bids to do so. But plans for both the Sprint and Clearwire purchases fell through in late June, paving the way for SoftBank and Sprint to continue unabated. It remains to be seen what exactly Dish will try next to gain a foothold in the wireless marketplace — but it'll have to find other partners to realize that dream.

At long last, Spring and SoftBank have set a date for their long courtship to finally be official: as of July 10th, SoftBank will complete its $21.6 billion acquisition of the third-biggest US wireless carrier. This announcement comes a few days after the FCC officially gave the transaction the green light, marking the acquisition's final hurdle. Dish has probably been the biggest thorn in the side of SoftBank — it made an aggressive offer to buy Sprint itself as part of its attempts to get into the wireless space. However, the company pulled out of the bidding in late June, paving the way for SoftBank and Sprint to finally finish their merger. At the same time, the FCC also gave the go-ahead to Sprint's planned purchase of Clearwire — another company Dish had its sights on. What all this means for Sprint's customers remains to be seen, but with the deal set to close we should learn more about SoftBank's plans for the carrier in the near future.

Somewhat surprisingly, a whopping 97 percent of Sprint's shares will be converted to cash — which means the corresponding shareholders decided to sell their stock. Only three percent of the share are being kept and converted into stock for the "new Sprint" corporation. While it's not clear exactly how many shareholders specifically decided to jump ship, the share breakdown suggests that a lot of them decided to get out now, despite the fact that they voted for the deal.

The deal had seen multiple challenges from Dish, which has been trying to find a way into the wireless market and made aggressive offers for both Clearwire and Sprint at different points. Congress also expressed concern that SoftBank would use Chinese networking equipment in the US, making the company promise not to do so as part of the deal.

The FCC joins the Department of Justice and the Committee of Foreign Investment in approving the deal, and so there doesn't appear to be any more major roadblocks to the buyout. In its statement, Sprint says "This decision completes all Federal government reviews" and that it expects all of the deals to close in "early July 2013."

A mere five days after acting FCC chairwoman Mignon Clyburn sent the Sprint-SoftBank-Clearwire deal to the committee for a vote, Bloomberg reports that at least two of the three sitting commissioners have voted for the deal. The vote means not only that the FCC will allow Softbank to go forward with its acquisition of Sprint, but will also not stand in the way of Sprint buying up the remaining portion of Clearwire that it has been pursuing. Both deals have been beset by high-stakes gamesmanship from Dish, which alternately tried to merge with Sprint and buy Clearwire out from under the carrier. The moves forced SoftBank to improve its offer for Sprint and forced Sprint itself to raise its offer for Clearwire — ultimately knocking Dish out of the running for either company.

Assuming that Bloomberg's report is correct, we may finally have some closure in one of the craziest mobile corporate sagas in recent memory, with more twists than the failed AT&T-T-Mobile tie-up and more turns than even LightSquared's ill-fated attempt to break into the industry. The US Department of Justice, Committee on Foreign Investment, and Sprint's own shareholders have all given a thumbs-up on the deal — so with the FCC's approval it looks as though there may not be any more significant roadblocks to the buyout.

Acting FCC Chairwoman Mignon Clyburn has sent the epic SoftBank-Sprint-Clearwire deal — the largest to hit regulators since AT&T's proposed purchase of T-Mobile USA — over to her fellow commissioners today, setting up the agency for an approval vote.

Though her tenure will ultimately be brief (assuming nominee Tom Wheeler makes it through the Senate's confirmation process), pressing business across the wireless industry means that Clyburn is going to end up leading the way on some major decisions with long-term implications. The vote — which would give FCC approval to Sprint's purchase of the outstanding stake of Clearwire that it doesn't already own, and to SoftBank's acquisition of Sprint — was made possible as satellite television provider Dish dropped its bids for both Sprint and Clearwire in recent days.

The Sprint, Dish, Clearwire, and SoftBank acquisition saga may be close to over. Dish has withdrawn its offer to purchase Clearwire, according to a press release pushed across the wire this afternoon. The satellite television company last bid $4.40 per share, but Sprint's latest offer of $5 per share — enough to earn the backing of Clearwire's board — has apparently convinced Dish to give up on this particular opportunity. Sprint, meanwhile, is in the middle of being acquired by Japan's SoftBank after Dish's own discussions to purchase the Kansas-based carrier fell through earlier this month.

It's unclear if today's news marks an end of Dish's wireless ambitions, or if the company will merely look for another acquisition to move it into the mobile space. It's rumored that Dish had discussions with T-Mobile in the past regarding a takeover, and Dish CEO Charlie Ergen has been steadfast in his belief that wireless is the way for the company to grow in the future.

SoftBank CEO Masayoshi Son and Sprint CEO Dan Hesse

SoftBank's efforts to purchase Sprint got one step closer to completion on Tuesday, as Sprint's shareholders overwhelmingly approved the proposed purchase. Sprint says that about 98 percent of the votes cast at a special shareholders meeting were in favor of SoftBank's offer. Facing a competing bid from Dish, SoftBank recently upped its offer to $21.6 billion in cash and stock — $16.64 billion of which would be delivered to Sprint shareholders. Sprint CEO Dan Hesse said "the transaction with SoftBank should enhance Sprint's long-term value and competitive position by creating a company with greater financial flexibility," in a prepared statement released after the vote. The companies expect the merger to close early next month, after which it will be subject to standard regulatory scrutiny.

Dish Network has pulled out of the competition to buy third-place US wireless carrier Sprint after months of back-and-forth with competitor SoftBank. After seeing the Japanese operator table a buyout offer in October 2012, Dish countered with its own surprise bid in April, leading to some heated exchanges in the media. Reuters reports that Dish will instead focus on acquiring Clearwire Corp. The company issued a statement on its change of plans in the form of a press release, the full text of which is below:

Television provider Dish has been working to get a wireless network off the ground, trying to acquire both Sprint and Clearwire over the past several months. In both cases it's faced uphill battles: the two boards have backed SoftBank and Sprint, respectively, leaving Dish a lot of ground to make up with shareholders. In the case of Clearwire, Dish actually managed to win them over, but was hit with a lawsuit from Sprint yesterday seeking to scuttle the offer.

SoftBank is reaching deeper into its pockets to increase its bid for third-place US carrier Sprint, raising the stakes to $21.6 billion in cash and stock. The bump is coming in the form of extra cash — $4.5 billion worth — but the nominal total still remains lower than Dish’s $25.5 billion bid. SoftBank CEO Masayoshi Son had previously been adamant that even though Dish is offering a higher figure, his company’s bid offers a better value for shareholders, calling Dish’s bid "incomplete and illusory." A shareholder vote on SoftBank’s proposal had been planned for Wednesday, but Sprint's board has since pushed it back to June 25th.

The board has unanimously backed SoftBank’s proposal, and the two companies are hoping to close the deal by early July, but Dish isn’t giving up without a fight. CEO Charlie Engel has previously said that "culture matters" in the acquisition, repeatedly pointing to national security concerns, and even drawing comparisons to the Dubai Ports World controversy in a bid to agitate investor unease. Dish promptly issued a response to SoftBank’s higher bid, hinting at the possibility of increasing its own offer in response. "We continue to believe that Sprint has tremendous value. We will analyze the revised SoftBank bid as we consider our strategic options," it said.

The Department of Justice (DoJ) has cleared the proposed merger of Sprint and Japanese carrier SoftBank, which will allow the FCC to make its final decision on the deal. Back in January, the DoJ asked the FCC to hold off approving the merger until it had adequately examined the proposed deal. In a letter to the FCC yesterday, the DoJ said that it had adequately reviewed the application, and "analyzed the measures undertaken by the applicants to address potential national security, law enforcement, and public safety issues, including supply chain issues." Based on this analysis, it has no objection to the deal.

The merger still has a way to go before being sealed. The deal still requires FCC approval, and could also be sabotaged by a pair of rival bids. Dish Network has launched two bids in recent months, one to merge with Sprint, and another to buy Clearwire, which Sprint is also attempting to buy. Sprint already owns half of Clearwire, and its spectrum represents a huge asset to whichever company ends up owning it outright. As if the situation wasn't confusing enough, a report from Reuters yesterday suggested that SoftBank was already holding talks with T-Mobile US' German owners to purchase the carrier if the Sprint deal falls through.

SoftBank has a pretty large bid in place to purchase Sprint, but according to a report from Reuters, it has a backup plan should the proposed purchase fall through. According to three unnamed sources, SoftBank is already in talks with Deutsche Telekom to purchase its T-Mobile US division if the Sprint deal isn't able to close.

The companies have been in discussions since last year, but those talks allegedly gained momentum when Dish Networks put in a higher bid for Sprint after SoftBank published its offer. Deutsche Telekom has been trying to sell its T-Mobile US company for quite some time — it was nearly purchased by AT&T back in 2011 before the FCC and other regulators blocked that deal from happening.

SoftBank and Sprint have agreed in principle to a deal with the US government that could remove the biggest regulatory roadblock in the path of the Japanese company's attempted $20.1 billion takeover, the Wall Street Journal reports. The agreement is designed to assuage fears that the acquisition could compromise national security; the WSJ's sources say that Sprint will have a four-member committee dedicated to the issue, with each member approved by the government and one of whom will sit on the carrier's board.

The government will also be able to veto equipment purchases made by Sprint, says the newspaper, with Sprint agreeing to replace some Chinese-made gear by the end of 2016 in a move that could cost over $1 billion. SoftBank and Sprint had already assured lawmakers that they would not use equipment from China in the existing Sprint network, and pledged to remove Huawei devices from Clearwire, which Sprint is in the process of acquiring. SoftBank uses gear made by Huawei and ZTE in its own networks.

SoftBank CEO Masayoshi Son wants Sprint, and he’s willing to make some significant concessions to get hold of it, like letting the US government choose one of the 10 directors to its board. The Wall Street Journal reported the news today, writing that the director in question will be in charge of overseeing national security issues. At the same time, rival Dish is hoping to derail SoftBank’s bid with a major PR blitz against its Japanese opponent, running full-page color ads in Washington publications like The Washington Post, Politico, and The National Journal, reports Reuters. The ads reportedly compare SoftBank’s proposal to acquire Sprint to the 2006 controversy surrounding Dubai Ports World’s ownership of various ports on America’s eastern seaboard. The ads reportedly feature the line "in an ever advancing world, ‘ports’ may change, but keeping them in American hands never should."

The specter of security has been raised repeatedly during SoftBank’s attempts to buy America's third-place carrier. In March, the two companies promised not to use Chinese networking equipment and even agreed to replace existing Huawei equipment already in use by Sprint acquisition target Clearwire after a 2012 Congressional report labeled the gear a national security risk. At the same time, Dish CEO Charlie Ergen has endeavored to take the focus off what Son is calling an "incomplete and illusory" bid for Sprint by publicly questioning whether a foreign entity ought to own an American telecom, saying Dish is more "culturally and geographically aligned" with Sprint.

It's an understatement to say that Sprint is in a period of transition — both Softbank and Dish are trying to buy the nation's third-largest wireless carrier. At the same time, Sprint and Dish are both trying to purchase Clearwire, and Sprint has just made a strong play for that spectrum. The carrier has just submitted a new, increased offer for Clearwire — the carrier is now offering $3.40 per share of the company that Sprint doesn't already own. That's up from the $2.97 Sprint initially offered and would value Clearwire as a whole at $10.7 billion — and it's a bit better than the $3.30 per share that Dish offered in its acquisition bid.

Sprint says that this is its "best and final offer," so there's not much to do but wait for Clearwire's board to make a determination. Regardless of what happens, though, it's clear that Sprint will look like a much different company in the coming months, but there's no way to say exactly how. Will Dish manage to purchase both Sprint and Clearwire, setting itself up to diversify beyond the satellite TV service it is known for, or will Sprint pick up the half of Clearwire it doesn't already own and then be sold off to Softbank? We'll be watching to see how all this drama plays out.

American satellite company Dish says it needs to find a new business model before its old one disappears. On an investor call, the company was asked whether it would rather have a merger with rival DirecTV or an acquisition of mobile carrier Sprint — A Dish-DirecTV merger was blocked by the FCC in 2002, and Dish made a surprise bid for Sprint just last month. Unsurprisingly, CEO Joe Clayton picked Sprint. "We would transform DISH and we transform Sprint," he said, according to TV Predictions. "And it becomes a unique company. It's something that nobody else can do inside and outside the home."

More dramatically, Clayton dismissed a DirecTV merger and, to some extent, both companies' core models. "While there'll be a lot of synergy and [a merged company] will be bigger," he said, "it's still the same company and you still would have to ultimately figure out how to transform that company long-term, in my opinion, because the video business has matured and ultimately, will go into decline phase." If it acquired Sprint, by contrast, it would create a unified network of TV, voice, and broadband services.

Last week, SoftBank CEO dissected Dish Network’s competing bid for Sprint, calling it "incomplete and illusory," but today he explained exactly why he thinks SoftBank is better poised than its competition to take control of the company: synergy. After introducing SoftBank's new summer phones at a carrier event in Tokyo, the CEO described its networking advancements like interference-reducing single frequency network (SFN) technology, and how he believed that they, along with its achievements in transfer speed and signal quality, would translate to benefits at Sprint.

Fielding a question from a Bloomberg reporter, Son elaborated, saying that the synergies amounted to a significant difference in the assets that the competing companies brought to the table. He also took the occasion to remind everyone that the 2.5GHz TD-LTE spectrum that Sprint stands to acquire from Clearwire is the same band that SoftBank uses. "SoftBank 4G" TD-LTE service is "the first time in the world that this transmission method has been employed for commercial use, and we’re already using it on a large scale," the CEO explained.

The US Securities and Exchange Commission has approved Japanese carrier SoftBank's plan buy a 70 percent stake in Sprint, paving the way for a vote next month. SoftBank, which made its plans public in October of last year, says it's now urging Sprint's shareholders to approve the $20 billion deal at a meeting on June 12th. If approved, SoftBank hopes the acquisition could close in July, putting control of America's third-largest carrier in the hands of a Japanese telecom juggernaut.

SoftBank, however, isn't the only one interested in Sprint. Dish has attempted to undercut the acquisition with its own $25.5 billion merger, prompting a furious volley of words between the two competitors' CEOs. SoftBank's Masayoshi Son has called Dish's last-minute offer "incomplete and illusory," and while Dish has attempted to argue that an American carrier is better off with another American company, Intel's outgoing CEO has said that a SoftBank deal could provide competition for the AT&T / Verizon duopoly.

Two days ago SoftBank CEO Masayoshi Son launched a heated attack on Dish Network's "incomplete and illusory" rival bid for Sprint, and now Dish chairman Charlie Ergen has fired back with shots of his own. In an interview with USA Today, Ergen sought to draw a line between his company and SoftBank by questioning whether the Japanese carrier has the ability to build a network on American soil.

"We are an American company, and the modernization of Sprint's network will have to be done from the U.S," said Ergen. "You have to climb the towers here, and you'll have to have U.S. employees who speak English. Operations command control will be in America. That's good for jobs. It doesn't mean that the other guys are bad. It's just that we have an advantage." Later, Ergen added "It's insulting to managers of Sprint to say that the only team that knows how to build a network is in Japan."

SoftBank CEO Masayoshi Son has come out swinging against the rival bid for Sprint from Dish Network. At a press conference in Tokyo, Son argued that it isn't necessary for SoftBank to raise its $20.1 billion bid for Sprint, and maintained that it represents a better option than Dish's $25.5 billion offer. While Dish has claimed that their bid is worth $7 a share, Son questioned the company's numbers, asking "Is it right? Is it true? Is it misleading? I would say the number is wrong. Totally wrong. It is incomplete and illusory."

Son is "very confident" that SoftBank offers "superior value" with its bid, despite the fact that Dish's is larger on paper. Son claims that Dish's share dilution, incremental debt, and cash outlay haven't been taken into account in the $7 figure, and in total should reduce the bid's value by 25 cents a share. A further 9 cents, Son argues, should be taken off because of the $600 million breakup fee payable to SoftBank if Sprint cancels the deal, along with $400 million in transaction expenses.

In its battle to acquire Sprint, Japanese carrier SoftBank has a surprising ally — Intel. The chipmaker’s CEO Paul Otellini sent an email to FCC chairman Julius Genachowski last week saying that he supports SoftBank, headed by the enigmatic Masayoshi Son, over a competing bid from TV provider Dish Network. "Son-san’s vision to build a high speed competitive third national network is very compelling," writes Otellini. "We need this competition in the wireless space as the ATT / Verizon model is not giving that to consumers at this time."

It’s hard to tell what effect Otellini’s recommendation will have, but it’s nonetheless interesting that he and Intel are taking a position on the matter. As it stands, SoftBank has said that it’s on track to close the $20.1 billion deal with Sprint by July 1st, but Dish contends that its $25.5 billion offer is a better deal for shareholders. Dish also raised concerns about the national security implications of a SoftBank / Sprint merger, although the companies' promise not to install Huawei networking equipment seems to have put them to rest.

Sprint is currently being courted by two different companies — Japanese carrier SoftBank is still hoping its $20.1 billion bid will clear on July 1st, but satellite TV provider Dish is now attempting a $25.5 billion takeover of the US's third-largest wireless carrier. Now, according to a just-released FCC filing, Dish is getting more aggressive about stopping the SoftBank / Sprint deal from going forward. Dish has asked US regulators to hold their review of the SoftBank deal on the grounds that a Sprint / Dish deal would be better for the country from a national security standpoint. The government was already looking into the SoftBank deal because of concerns about the Japanese carrier using Huawei equipment, which the US believes is a national security risk — Dish is hoping its deal with Sprint will prove to be a safer option.

Security isn't the only trump card Dish is playing — the company also claims its deal will be better from a business perspective. There's the $5 billion difference in the offer Dish is making, plus the company claims that SoftBank's foreign roots means it lacks "existing in-market infrastructure" that Dish has. The company is hoping that the FCC will hold off ruling on the Sprint / SoftBank deal so that Sprint can properly evaluate Dish's offer without "undue interference" — a bit of a bold claim since SoftBank's deal has been on the table since October of last year.

SoftBank's planned $20.1 billion takeover of Sprint was thrown into disarray yesterday by a $25.5 billion rival bid from Dish Network, but the Japanese carrier still expects the acquisition to proceed as planned. In a statement provided to AllThingsD, SoftBank said that the deal is set to be completed on July 1st.

Reuters reports that if SoftBank were to walk away from the deal, it could stand to gain up to $3.5 billion from a break-up fee, currency hedging based on the depreciated yen, and a convertible bond. But the carrier's charismatic CEO Masayoshi Son is unlikely to get a better chance to make a splash in the US market, and it's not surprising to see his company reaffirm its commitment to the takeover. Whether that will require an increased offer to match Dish, however, remains to be seen.

Dish Network has launched a $25.5 billion takeover bid that would see it take control of Sprint. Japanese carrier SoftBank is currently in the process of purchasing Sprint, but Dish's offer could derail the takeover. Today's announcement represents a proposal, rather than a legally-binding offer, but The Wall Street Journal says the company is confident it can raise the funds necessary for such a large purchase. Under the conditions of the bid, Dish's shareholders would gain full control over the merged company.

Although cellular networking is new to Dish, the company has been making moves to get involved in the field. After expressing an interest in partnering with T-Mobile last year, it battled with Sprint for control of Clearwire in January by placing a rival takeover bid in for the carrier. As well as making moves to buy out Clearwire, Dish also gained FCC approval to build its own LTE network.