AT&T to Acquire Prepaid Carrier Leap Wireless/Cricket for $15/Share

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NewImageAT&T has agreed to acquire Leap Wireless, the parent company of prepaid U.S. wireless carrier Cricket, for $15/share -- roughly $1.2 billion in cash, plus the $2.8 billion in net debt that the company holds.

The company has 5 million subscribers, and AT&T will keep the Cricket brand and retail stores operating. Last year, Leap engaged in a three-year agreement with Apple to sell iPhones.

AT&T Inc. and prepaid wireless provider Leap Wireless International Inc. have entered into an agreement for AT&T to acquire Leap for $15 per share in cash. Under the terms of the agreement, AT&T will acquire all of Leap’s stock and wireless properties, including licenses, network assets, retail stores and approximately 5 million subscribers. As of April 15, 2013, Leap had $2.8 billion of net debt. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap’s 700 Mhz “A Block” spectrum in Chicago, which Leap purchased for $204 million in August 2012.

Leap’s network covers approximately 96 million people in 35 U.S. states. Leap currently operates -- under the Cricket brand -- a 3G CDMA network, as well as a 4G LTE network covering 21 million people in these areas, and has 3,400 employees.

The transaction is expected to be closed within six to nine months.

Top Rated Comments

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95 months ago
Cool. Just keep inching closer to a monopoly...
Score: 8 Votes (Like | Disagree)
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95 months ago

Cool. Just keep inching closer to a monopoly...


AT&T still remains a monopoly from the old days, albeit a smaller one.
Score: 4 Votes (Like | Disagree)
Avatar
95 months ago

Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?


Spectrum for LTE
Score: 4 Votes (Like | Disagree)
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95 months ago
I'm sure cynics will disagree, but I suspect AT&T won't change much about Cricket. This gives them the ability to gain price-sensitive customers without diluting the AT&T brand with lower-priced plans. Absorbing or altering Cricket would destroy that opportunity.
Score: 3 Votes (Like | Disagree)
Avatar
95 months ago
Less competition, higher prices. What isn't to like?
Score: 2 Votes (Like | Disagree)
Avatar
95 months ago
Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?
Score: 2 Votes (Like | Disagree)

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