The transaction is expected to be completed by the middle of 2013
Japanese telecommunications firm Softbank has agreed to acquire 70% stake in the US carrier Sprint Nextel for $20.1bn.
Of the total purchase price, about $12bn will go to Sprint shareholders and the remaining $8.1bn will be used to strengthen the company’s balance sheet.
The transaction, which is subject to regulatory approvals, is expected to be completed by the middle of 2013.
Upon completion of the transaction, SoftBank will form a new US subsidiary, known as New Sprint, which will invest $3.1bn in a newly issued Sprint convertible senior bond.
As per the terms of the deal, Dan Hesse will stay in his job as chief executive of Sprint and the company’s headquarters will continue to be in Overland Park, Kansas, US.
Sprint, which has $21bn in long-term debt, had struggled to compete with Verizon and AT&T and had recently launched a restructuring network.
Softbank CEO Masayoshi Son said: "This transaction provides an excellent opportunity for Softbank to leverage its expertise in smartphones and next-generation high-speed networks, including LTE, to drive the mobile Internet revolution in the world’s largest market."
Earlier this month, Softbank had agreed to acquire telecom services company eAccess for $1.84bn to compete with its rival KDDI.
Softbank entered into mobile carrier business in 2006 by acquiring Vodafone’s Japan unit for $15.5bn.