Softbank Corp. closed a $21.6 billion deal to gain a controlling stake in Sprint, the firm said Thursday, creating a stronger player in the competitive wireless market by acquiring the No. 3 U.S. mobile carrier.
The deal was completed after the end of Wednesday’s trading in New York.
A separate deal that gives Sprint full control of wireless broadband provider Clearwire was also closed, Softbank said.
“Softbank Corp. and Sprint Nextel Corporation today announced the completion of their previously announced merger whereby Softbank has invested approximately $21.6 billion in Sprint,” the company said.
With the new cash infusion and Clearwire’s spectrum, the new Sprint is expected to be able to better compete with the top U.S. carriers, AT&T and Verizon.
Softbank had targeted Sprint as a way to gain entry into the hot U.S. telecom market but ran into competition from Dish Network, which forced Softbank to increase its offer by $1.6 billion from the original $20 billion proposal.
The deal is the largest overseas acquisition ever made by a Japanese firm. Sprint stockholders will retain a 22 percent stake in the new firm.
The Softbank deal received clearance from U.S. national security officials in May under the condition that it appoint an independent member to the Sprint board of directors to serve as security director.
The director, who must be approved by U.S. authorities, would oversee national security matters and serve as a point of contact for U.S. agencies.
The Federal Communications Commission gave final U.S. regulatory approval to the deal on July 5.
Meanwhile Wednesday, Sprint Nextel Corp. said it is dropping the Nextel part of its name as it completes the deal with Softbank.
The company will retain its ticker symbol S on the New York Stock Exchange but go by the simplified name Sprint Corp., according to a statement.
The name change turns the page on an ugly chapter for the company, which spent $36 billion on Nextel Communications Inc. only to write off most of the purchase price after struggling to integrate the two companies’ networks. Sprint ultimately shut down the Nextel system this year.
Sprint Chief Executive Officer Dan Hesse will remain at the helm of the newly minted company. Masayoshi Son, Softbank CEO, will serve as chairman while Softbank board member Ronald Fisher will be vice chairman.