US telecommunications giant AT&T has agreed to acquire Leap Wireless for $15 per share in cash, valuing the prepaid mobile operator at about $1.2bn (£800m).
The move comes amid continued consolidation and restructuring in the wireless industry; Sprint Nextel finalised its acquisition of Clearwire, Japanese investment firm SoftBank purchased a 78 per cent stake in Sprint Nextel, and Deutsche Telekom's T-Mobile USA took over MetroPCS to form T-Mobile US.
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It had initially been reported that Leap would be acquired by T-Mobile, while T-Mobile itself had been subjected to reported interest from AT&T in 2011, in what would have been an astounding $39bn acquisition.
AT&T will now acquire all of Leap's stock and wireless properties, including licences, network assets, retail stores and about five million subscribers. As of April 15, 2013, Leap had $2.8bn of net debt.
Leap, which has 3,400 employees, said its 3G CMDA network covered about 96 million people in 35 US states, while it offers 4G LTE services to 21 million people within these areas.
AT&T will retain Leap's Cricket brand name, provide Cricket customers with access to AT&T's larger 4G LTE network, make use of Cricket's distribution channels, and expand Cricket's presence to additional US cities.
"The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service," AT&T said.
The second largest US telecoms operator said that the acquisition includes spectrum that is largely complementary to its existing spectrum licences. It claimed that immediately after approval of the transaction, it would use Leap's unused spectrum that covered 41 million people, to further its 4G LTE deployment, providing additional capacity and better network performance for its customers.
Meanwhile, Leap shareholders will be entitled to the net proceeds received on the sale of Leap's 700MHz spectrum in Chicago, which Leap purchased for $204m in August 2012.
