AT&T to Acquire Leap Wireless for $1.19B

AT&T has agreed to acquire prepaid operator Leap Wireless for $15 per share or around $1.19 billion.

The U.S.'s second-largest wireless operator announced the deal late Friday, noting that it will acquire the entirety of Leap's stock and wireless properties, including licenses, network assets, retail stores and its 5 million subscribers. AT&T will also be acquiring Leap's $2.8 billion of net debt and the net proceeds from the sale of its 700MHz A block spectrum in Chicago, which it purchased in August of 2012 for $204 million.

The main attraction for AT&T was likely Leap's spectrum holdings. The contract-free provider operates a 3G CDMA network and an LTE network covering 21 million people in the U.S. It holds complementary spectrum in both the PCS and AWS bands reaching 137 million people. AT&T plans to put the spectrum to use as soon as the deal closes.

"Immediately after approval of the transaction, AT&T plans to put Leap's unutilized spectrum -- which covers 41 million people -- to use in furthering its 4G LTE deployment and providing additional capacity and enhanced network performance for customers' growing mobile Internet usage," a press release on the deal notes.

AT&T says it will retain the name Cricket, Leap's consumer-facing brand, and tap into its distribution channels as it plans to use the acquisition to shore up its presence in the prepaid market.

The deal will have to pass regulatory approval in the U.S., something AT&T didn't manage when it attempted to acquire T-Mobile US in 2011. AT&T says that owners of nearly 30 percent of Leap's outstanding shares have agreed to vote in favor of the transaction. It expects the deal to close in six to nine months.

— Sarah Reedy, Senior Editor, Light Reading