AT&T has signed an agreement to acquire the wireless services provider Leap Wireless International for $1.19bn (£790m) in cash or $15 per share.
The acquisition will involve all of Leap’s stock and wireless properties, including licenses, network assets, retail stores as well as about 5 million subscribers.
Under the agreement, the Leap shareholders will also obtain a contingent right of the net proceeds received on the sale of Leap’s 700Mhz ‘A Block’ spectrum in Chicago that was bought by the company for $204m in August 2012.
Leap currently operates a 3G CDMA network and a 4G LTE network covering under the Cricket brand, which will be retained by AT&T in order to offer Cricket customers with access to its 4G LTE mobile network.
According to the company, the integration will offer financial resources, scale and spectrum to better compete with other major national network providers for customers interested in low-cost prepaid service.
The acquisition also includes spectrum in the PCS and AWS bands that covers about 137 million users as is claimed to support AT&T’s existing spectrum licenses.
Expected to close in six to nine months, the transaction is subject to review by the US Federal Communications Commission and the Department of Justice and other customary closing conditions.
Following the approval, AT&T is planning to use Leap’s unutilised spectrum in its 4G LTE deployment and providing additional capacity and enhanced network performance to meet the increasing mobile Internet usage demands from the customers.