SoftBank will distribute $12.1 billion to existing Sprint shareholders and inject another $8 billion to strengthen Sprint’s balance sheet. The deal will give the Japanese company a 70 percent share in a new publicly traded company called New Sprint. The transaction, which is subject to shareholder and regulatory approval, is expected to close in mid-2013.
If completed, the deal will be the largest overseas acquisition by a Japanese company ever. The past year has seen a spate of outbound Japan deals, due in part to the strong yen making overseas assets less expensive.
The deal comes as Overland Park, Kansas-based Sprint lags its more powerful competitors—Verizon Wireless and AT&T—in the U.S. mobile market. The company is carrying $21 billion in debt, according to the New York Times, and has spent billions more in an attempt to upgrade its networks to support data-heavy smartphones like the iPhone 5.
SoftBank, which is Japan’s third-largest mobile carrier, has long harbored ambitions to expand in the United States, though some analysts were surprised by the deal because of the company’s recent focus on deals closer to home. Just earlier this month, SoftBank announced it was acquiring rival Japanese mobile carrier eAccess Corp. for $2.3 billion.
Morrison & Foerster, which has one of the largest Japan practices among U.S. firms, is acting as lead counsel to SoftBank, with no less than 16 partners working on the deal. Tokyo office head Kenneth Siegel and San Francisco-based global mergers and acquisitions head Robert Townsend led a team that also included Tokyo partners Andrew Winden, Ivan Smallwood, Dale Caldwell, and Eric Roose; San Francisco partners Jaclyn Liu, Brandon Parris, and Bernie Pistillo; Palo Alto partners David Lipkin and Michael Frank; Washington, D.C. partners Jeff Jaeckel, David Meyer, and Nicholas Spiliotes; Los Angeles partner Kathryn Johnstone; and New York partner Peter Dopsch.
Skadden is lead counsel to Sprint. The firm’s team includes New York partners Thomas Kennedy, Yossi Vebman, Stephanie Teicher, Regina Olshan, Dean Shulman, and Matthew Hendrickson, as well as Washington partners Jeremy London, Steven Sunshine, Ivan Schlager, and Antoinette Bush. The firm has regularly acted for Sprint in the past, including in its opposition to AT&T’s proposed merger last year with Germany T-Mobile, which was abandoned after U.S. antitrust authorities sought to block it.