Sprint in active talks to acquire the remaining 49 percent of Clearwire

By , Dec 11, 2012

Despite a strong opposition from AT&T, the nation’s third-largest carrier Sprint Nextel mid-October announced its intent to control Clearwire, where it had a 48 percent stake, by gain control of its board via agreements with Clearwire’s investors. A few days later, Sprint bought out one of Clearwire’s shareholders to increase its 48 percent stake to a controlling 50.8 percent stake. And now, according to the Wall Street Journal, the wireless carrier is moving to acquire the remaining 49 percent of Clearwire it doesn’t own yet…

Sharon Terlep and Anton Troianovski, writing for WSJ:

Sprint Nextel Corp. is in talks to acquire the 49% of Clearwire Corp. it does not already own in a move to clear up a tangled ownership structure that has left Sprint unable to control the decisions of a key strategic partner, people familiar with the situation said Tuesday.

Any such deal, however, is dependent on approvals from a diverse group of Clearwire shareholders. Let’s also not forget that Japan’s Softbank wants to snap up Sprint, which could easily complicate the Clearwire transaction.

“Sprint may seek to condition a Clearwire deal on the Softbank deal going through”, according to a person briefed on the situation.

Sprint, of course, wants full control of Clearwire, a US-based wireless broadband operator.

The carrier is especially interested in Clearwire’s spectrum rights as it looks to bolster its own network. Clearwire has more than 100MHz of 2.5GHz spectrum and Sprint could make good use of it amid network consolidation efforts that are underway.

As wireless carriers in the United States and elsewhere are faced with more data-hungry users than ever before, some are finding out that it’s cheaper to invest in targeted acquisition than pour billions in beefing up network infrastructure.

We’ll see if mergers and acquisitions in the wireless space lead to lower prices and greater choice for the consumer. If history teaches us anything, big mergers are usually smaller than the sum of their parts.

Thoughts?

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