AT&T has announced plans to purchase mobile carrier Leap Wireless.
The acquisition, worth up to $4 billion, will provide AT&T the prepaid phone franchise known as Cricket.
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According to AT&T, the second-largest U.S. mobile carrier, $2.8 billion of Leap Wireless' debt will be covered by AT&T and will pay $15 per share.
Under the merger, AT&T will consume Leap Wireless' stock and wireless properties, licenses, retail stores, and subscribers. According to CNET, Leap Wireless has access to 96 million people across 35 states.
"The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service,"
Despite the likely acquisition, AT&T stated the Cricket brand name will not change. In fact, AT&T plans on expanding Cricket's service to more U.S. cities.
"The [Cricket expansion] result will be increased competition, better device choices, improved customer care and a significantly enhanced mobile Internet experience for consumers seeking low-cost prepaid wireless plans," said AT&T in a statement on July 12.
The merger is subject to review by the Federal Communications Commission (FCC) and the Department of Justice, but AT&T expects the transaction to close in six to nine months.
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