**Editor's Note: Please click here for a recap of the biggest mergers in Q2 2013.**
In its first major M&A move since being denied its pursuit of T-Mobile USA, AT&T says it has a deal in place to buy Leap Wireless for $15 per share, or roughly $1.2 billion in cash. As part of the deal, AT&T will absorb Leap's $2.8 billion in debt.
Leap's network, which operates under the Cricket brand, covers 35 states. Leap has a 3G CDMA network as well as a 4G LTE network. The company has 3,400 employees.
The Cricket name will continue to exist. AT&T says Cricket customers will now have access to its 4G LTE mobile network, better device choices, improved customer care and a significantly enhanced mobile Internet experience.
This is a big step forward in the prepaid business for AT&T. The carrier has approximately 107 million wireless customers, but only 7 million of those are on prepaid plans through the company's GoPhone and Aio brands.
Of course, acquiring Leap's spectrum is an important part of this deal. The acquisition includes spectrum in the PCS and AWS bands covering 137 million people and is largely complementary to AT&T’s existing spectrum licenses. Immediately after approval of the transaction, AT&T plans to put Leap’s unutilized spectrum – which covers 41 million people – to use in furthering its 4G LTE deployment and providing additional capacity and enhanced network performance for customers’ growing mobile Internet usage.
The transaction must still get FCC and Department of Justice approval. Look for the deal to close in six to nine months.
This is just the latest consolidation in the industry. Sprint, America's third-largest wireless operator, just this week closed its acquisition of broadband provider Clearwire; nearly three-quarters of Sprint was purchased by Japan's SoftBank. T-Mobile, the No. 4 operator, also recently closed its acquisition of MetroPCS, the fifth-largest.
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