The U.S. Federal Communications Commission (FCC) has announced Sunday its approval of AT&T's acquisition of Leap for public interest. This would bring Leap's customers and airwaves to the second largest telecommunications company.
On July 12, 2013, AT&T and Leap Wireless International Inc., a prepaid wireless provider, have entered into an acquisition deal where the former will buy each share of Leap for $15 in cash, or $1.2 billion. Under the terms of the deal, AT&T will also acquire all of Leap's stock and wireless properties, such as its retail stores, licenses, network assets, and millions of subscribers. The deal also included Leap's in net debt amounting to approximately $2.9 billion.
After roughly a month, AT&T filed an application to FCC that sought for the commission's approval to grant the company full control of all Leap's properties.
After months of review, the commission has finally approved the transaction for Leap. A spokesperson for the U.S. Department of Justice, Gina Talamona, said that Anti-trust regulators gave it a green light.
According to Bloomberg Businessweek, aside from the additional 4.6 million subscribers, AT&T has agreed to take away airwaves in 12 areas and maintain the pre-paid rate plans of $40 monthly or less.
The approval of the deal stretches a string of telecommunications acquisitions as small network providers in the United States yearns to team up with bigger network providers. The announcement of the deal in July 12 also increased shares of Leap in the market, where it closed at $17.52 at 4:00 p.m. (time in New York).
However, John Bergmayer, senior staff attorney with the policy group based in Washington, Public Knowledge, e-mailed Bloomberg Businessweek implying that it has uncertainties about the deal. He said that though he was happy with the divestitures of airwaves, the elimination of low-cost network provider, like Leap, in the market was "troubling."
