Leap of faith? AT&T prepares USD1.2bn takeover of pre-paid firm

15 Jul 2013

AT&T Inc has announced that it has agreed to acquire San Diego-based Leap Wireless International, which offers services under the ‘Cricket’ brand name, in a deal worth USD1.2 billion. Under the terms of the agreement AT&T will pay USD15.0 per share to acquire all of Leap’s stock and wireless properties, including licences, network assets, retail stores and approximately five million subscribers. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap’s 700MHz A block spectrum in Chicago, which Leap purchased for USD204 million in August 2012.

Leap’s CDMA network currently covers approximately 96 million people in 35 US states, while its 4G Long Term Evolution (LTE) network – which launched in December 2011 – covers 21 million people. Going forward, AT&T has indicated that it will retain the Cricket brand name, provide existing customers with access to its own nationwide LTE network and expand Cricket’s presence to additional US cities. The acquisition includes spectrum in the PCS and AWS bands covering 137 million people, which AT&T says is largely complementary to its existing spectrum holdings.

The transaction is subject to review by the Federal Communications Commission (FCC) and the Department of Justice (DoJ), as well as other customary closing conditions. AT&T expects the transaction to close within a six-to nine-month timeframe.

United States, AT&T, AT&T Communications, Leap Wireless International