updated 12:05 pm EDT, Tue September 4, 2007
MetroPCS and Leap Merger
MetroPCS today announced that it had proposed a merger with Leap Wireless, aiming to create what it says would be the fifth major cellular provider in the US after AT&T, Verizon, Sprint, and T-Mobile. The deal would include a stock deal where each share in Leap would be swapped for 2.75 shares of MetroPCS worth roughly $5 billion; an additional $2 billion would go towards canceling Leap's outstanding debts, MetroPCS said. The timing of the proposal was not clarified, though the potential buyer noted that a combined provider would span almost all of the top 200 cities, giving the merged entity much more access to smaller markets.
The merger was also likely to eliminate potential overhead for both companies and that about $2.5 billion of the total network's efforts would be shared, according to MetroPCS. The offer wasn't characterized as hostile and wasn't set to bind Leap to any particular agreement. Leap had yet to respond to the proposal as of press time.
The MetroPCS merger follows a series of smaller takeovers by larger carriers in an attempt to consolidate the market, which was highlighted by AT&T's acquisition of Cellular One and its parent company in the early summer.