NEW YORK, Jul 28 – US telecom company Sprint Nextel is buying Virgin Mobile USA in a stock deal worth some 483 million dollars, the companies announced on Tuesday.
Sprint Nextel, which already owns 13.1 percent of Virgin Mobile USA, said the acquisition will strengthen its position in the prepaid cell phone market by combining the Virgin Mobile brand with its Boost Mobile business.
The companies said that under the agreement, which has been approved by both their boards, Sprint will retire all of Virgin Mobile USA\’s outstanding debt, expected to be no more than 205 million dollars as of September 30.
Sprint expects to issue between 81.4 million and 104.7 million shares of common stock in exchange for all Virgin Mobile USA common stock, excluding Sprint\’s 13.1 percent stake, and all Virgin Mobile USA preferred stock.
"The acquisition of Virgin Mobile USA positions Sprint for even greater success in the prepaid wireless segment," Sprint Nextel president and chief executive Dan Hesse said in a statement.
"Prepaid is growing at an unprecedented rate with consumers keenly focused on value. Virgin Mobile is an iconic brand in the marketplace that will complement our Boost Mobile brand."