Sprint gets the Green Light for Virgin Mobile USA Purchase

By: Juan August 25th, 2009

Federal antitrust authorities have allowed Sprint to move forward with the purchase of  Virgin Mobile for a cool $483 million.

The Federal Trade Commission announced the decision Monday. The deal is expected to close in the fourth quarter or in early 2010, subject to various approvals, including from Virgin Mobile shareholders, the Federal Communications Commission and the Securities and Exchange Commission.

On July 28, Overland Park Kan.-based Sprint (NYSE: S) said the companies’ boards had approved a definitive agreement for Sprint to buy Virgin Mobile (NYSE: VM), based in Warren, N.J., for an amount that includes the value of Sprint’s current 13.1 percent ownership of Virgin Mobile.

Sprint hopes the acquisition will give it a stronger foothold in the booming prepaid market, in which it has gained more than 1.5 million customers this year with its Boost Mobile business. Sprint will keep the two brands to target different audiences, cross-sell other Sprint services and save through combining general and administrative operations.

Virgin Mobile was formed in mid-2002 as a joint venture between Sprint and United Kingdom-based Virgin Group Ltd., each of which invested as much as $150 million. In 2007, Virgin Mobile became a public company in which Sprint and Virgin Group remain investors. The Sprint network powers Virgin Mobile’s service.

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Filed Under: Sprint News

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