Verizon announced today that is buying pre-paid and value mobile provider Tracfone for more than $6 billion in cash and common stock. The company has entered into a deal with Tracfone's parent company, America Movil, for the acquisition.
As part of the agreement, Verizon will add Tracfone's approximately 21 million subscribers to its customer base when the acquisition is completed. It will also provide 4G LTE and 5G networks to existing Tracfone customers. The carrier expects the closure to happen in the second half of 2021.
Regarding the deal, Hans Vestberg, Chairman and CEO of Verizon, said:
“This transaction is aligned with what we do best: providing reliable wireless service alongside a best-in-class customer experience. We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market. We are pursuing this important strategic acquisition from a position of strength given our very strong and prudent financial profile.”
Tracfone has been operating as a mobile virtual network operator (MVNO) in the U.S., running the StraightTalk, Net10, and Walmart Family Mobile brands in the country. It depends on Verizon’s wireless network to serve more than 13 million customers, with over 90,000 locations across the U.S.
Verizon will pay $3.125 billion in cash and $3.125 billion in common stock, plus up to an additional $650 million cash in the future relating to performance measures and other commercial deals. Ronan Dunne, Executive Vice President and Group CEO of Verizon Consumer Group, also said Tracfone’s nearly 850 employees will transition to the company when the deal is closed.