Sprint Nextel is acquiring Midwest affiliate iPCS in a deal worth €555 million, ending years of litigation over territory rights for network access.
The deal ensures that Sprint will no longer be required to divest its iDEN network in certain iPCS territories, and plans to terminate its previously announced divestiture process.
”Acquiring iPCS brings added value to Sprint by expanding our direct customer base, growing our direct coverage area and simplifying our business operations,” said Sprint Nextel CEO Dan Hesse.
The two companies had been in litigation since 2005 following Sprint's acquisition of Nextel Communication. IPCS, which has exclusive rights to use the Sprint brand in its operating regions, has been arguing since 2005 that the Sprint Nextel deal violated its affiliate agreement. IPCS had also wanted Sprint to stop operating the Nextel network in it market territories and sued Sprint over a deal that gave it 51% ownership of Clearwire, arguing that this deal also violated the affiliate agreement.
The acquisition from Sprint marks the latest in a series of nine affiliate acquisitions totaling over €10.6 billion, including debt. Sprint's market capitalization is just under €6.68 billion.
Under the deal the companies plan to suspend all pending litigation between them, with final resolution upon closing of the deal, expected either in late 2009 or early 2010.
“We are very pleased to have reached this agreement with Sprint Nextel. Given the increasingly competitive landscape, we believe this is an opportune time to provide our shareholders with a liquidity event at a very attractive price,” said Timothy M. Yager, president and CEO of iPCS.