Shareholders in US operator Sprint have “overwhelmingly” approved SoftBank’s $21.6 billion deal to acquire a 78% stake in the company.
The yes vote smooths the way for a takeover of the third-biggest operator in the US by its counterpart in Japan.
SoftBank (Tokyo, Japan) had faced competition over a Sprint (Overland Park, KS, USA) takeover from Dish Network (Meridian, CO, USA), but the satellite TV company last week announced that it was abandoning attempts to acquire Sprint, making a decision easier for Sprint shareholders.
Some 98% of votes cast at Sprint’s shareholder meeting were in favour of the SoftBank takeover, according to Sprint’s statement.
“The transaction with SoftBank should enhance Sprint’s long-term value and competitive position by creating a company with greater financial flexibility,” said Dan Hesse, Sprint’s chief executive.
Regulatory authorities have yet to sign off on the deal, but it seems unlikely to face substantial objections because it does not involve a tie-up between existing players that would affect the shape of the market.
Indeed, Sprint and SoftBank expect the tie-up to be completed as soon as early July.
Sprint has struggled to compete against bigger rivals AT&T (Dallas, TX, USA) and Verizon Wireless (New York City, NY, USA) and many analysts believe the financial backing and experience of SoftBank could help transform its fortunes.
SoftBank has said it will immediately provide $5 billion to Sprint for the extension of 4G networks, which cover a much smaller area than infrastructure owned by AT&T and Verizon.
Sprint has been trying to compete aggressively on price by continuing to offer its customers unlimited, flat-rate tariffs, which have been scrapped by the country’s other operators, and the support of SoftBank could help it to maintain this approach.
Moreover, SoftBank’s experiences in Japan – where the high-speed data market is more developed than in the US – should stand Sprint in good stead.
The operator also appears to have seen off competition from Dish for Clearwire (Bellevue, WA, USA), a mobile broadband operator in which Sprint owns a 50% stake.
Sprint has offered $5 a share to take full control of Clearwire and last week received the backing of Clearwire’s board, which had previously thrown its support behind a $4.40-a-share offer from Dish.
Clearwire’s shareholders are set to vote on Sprint’s bid in early July and control of the company’s vast spectrum resources could help Sprint more easily to realize its mobile broadband objectives.