The transaction is expected to close in mid-2013, subject to a meeting of Sprint shareholders, and the usual FCC and antitrust approval, as well as SoftBank's ability to secure financing. In the event that it can't raise the necessary cash, the Japanese carrier will have to cough up $600 million in termination fees. Likewise, Sprint will have to pay the same $600 million if it gets a better offer, or $75 million if its shareholders don't approve the deal.
The two companies' combined subscriber base will be one of the largest in the world, and will have the third highest mobile service revenue of any company worldwide. In a press release, Sprint CEO Dan Hesse (who was in attendance) said of the acquisition:
Hesse will become the CEO of New Sprint, a newly-constructed company which, between outstanding public shares and the 70 percent stake owned by SoftBank, will control 100 percent of the existing Sprint. As he took the stage, Hesse tried to allay the fears of those in attendance, saying, "we have a lot of lawyers and their core competency is adding words to everything." He moved on to discuss Sprint's market position — it's the third largest postpaid and second largest prepaid operator in the US, before pointing out that the company is first place in revenue growth and average revenue per customer (ARPU) growth. Moving on to the benefits of the deal, the CEO said Sprint will gain an extra $8 billion in equity financing to do things like build out its 4G LTE network and improve its balance sheet. The timing of the investment is key, said the CEO, at a time when Sprint is financially constrained in its ability to improve its networks.
Read More: Sprint