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AT&T to buy Leap Wireless for $1.2bn

Deal to close in next 9 months.

Telecommunications services giant AT&T has signed an agreement to acquire Leap Wireless International’s stock and wireless properties, including licenses, network assets, retail stores and approximately five million subscribers for $1.2bn, or $15 per share in cash.

Leap’s network provides services to approximately 96 million people in 35 US states. It currently operates a 3G CDMA network under the brand Cricket, as well as a 4G LTE network covering 21 million people in these areas.

As part of the deal, AT&T will also acquire spectrum in the PCS and AWS bands covering 137 million people.

AT&T, in a statement, said that the combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service.

AT&T intends to utilise Leap’s unused spectrum to further its 4G LTE deployment, following the approval of the transaction.

Leap Wireless, which employs 3,400 people, had $2.8bn of net debt as of 15 April 2013.

The transaction, which is subject to regulatory approvals, is expected to close in the next six to nine months.