[FT] Sprint Nextel, the third largest US mobile network operator, agreed to acquire Virgin Mobile USA, a leading prepaid phone company, in an all stock deal valued at $5.50 per share or $483m including Sprint’s existing 13.1 per cent stake in Virgin Mobile USA.
The deal, which is expected to close in the fourth quarter or early next year, will enable Sprint to significantly expand it presence in the US prepaid phone market and combine Virgin Mobile USA, set up by Richard Branson’s Virgin group, with its existing Boost Mobile prepaid unit.
Boost Mobile has emerged as a key growth driver for Sprint which has been struggling to stem post paid subscriber losses following its $36bn acquisition of Nextel in 2005.
The prepaid market in the US has benefited recently as consumers, concerned about job losses and facing an uncertain economic outlook, have turned to prepaid plans as a way to control mobile phone spending.
Sprint-Nextel to acquire Virgin Mobile USA