Japan\'s Softbank announces $20 bn Sprint-Nextel buyout

Softbank said the ambitious takeover would see it acquire 70 percent of Sprint Nextel, the third-biggest US mobile firm behind AT&T and Verizon Wireless, with the deal set for completion in the middle of next year.

The purchase "enables Softbank to establish an operating base as one of the largest mobile Internet companies in the world", it said in a statement announcing the deal.

The corporate marriage, which will have about 90 million subscribers, would vault Softbank to third spot globally among mobile firms after China Mobile and Verizon, it said.

Softbank, Japan\'s third-largest mobile operator, confirmed the deal would be financed with cash and loans from Japan\'s major lenders and Deutsche Bank.

The agreement would provide heavily indebted Sprint with liquidity to remain competitive in a US field dominated by AT&T and Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group.

However news of the deal last week prompted ratings agency Standard & Poor\'s to put the Japanese firm\'s credit rating on review, saying it would heap pressure on its already debt-heavy balance sheet.

Softbank shares lost 5.30 percent to 2,268 yen in Tokyo trade on Monday, after tumbling 17 percent on Friday as the company confirmed it was in talks with Sprint.

Japan\'s Nikkei business daily also reported last week that Softbank was separately eyeing fifth-ranked US carrier MetroPCS Communications at just a fraction of the Sprint price tag.

The Sprint acquisition could trigger a clash with Deutsche Telekom, after its US affiliate T-Mobile USA unveiled a plan for a merger with MetroPCS in a deal that would boost the fourth-largest US wireless carrier\'s effort to compete in the American market.

Deutsche Telekom would hold a 74 percent stake in the new company.

Some analysts say the Softbank offer for Sprint could be part of a more complex effort to acquire MetroPCS before the T-Mobile deal is consummated.

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