OVERLAND PARK, Kan. - Sprint, one of the largest employers in Kansas City has struck a deal with Japanese telecommunications giant Softbank.
Softbank will buy a 70 percent stake in Overland Park, Kan.-based Sprint, in exchange for $20.1 billion.
The deal was announced Monday at a joint news conference in Tokyo by Softbank President Masayoshi Son and Sprint Chief Executive Dan Hesse.
Of the purchase price, $12.1 billion will be used to purchase existing Sprint stock at $7.30 per share. The remaining $8 billion will go toward the purchase of new shares at $5.25 each. The companies said they expect the deal to close in mid-2013.
The deal, approved by the boards of both companies, still needs approval from Sprint shareholders and U.S. regulators.
41 Action News went straight to the experts to find out what the merger means for Sprint customers and employees in Kansas City.
Two financial analysts from UMKC and Rockhurst told reporter Sarah Hollenbeck that the merger is a good thing, considering Sprint was up to its eyeballs in debt, and has long trailed its larger rivals AT&T and Verizon Wireless.
UMKC Professor Nathan Mauk has been closely tracking Sprint for years.
"It's a tough industry they're in," he said. "They're up against two competitors that are quite a bit larger than Sprint. It's difficult for them to keep up."
In the financial world, Sprint's business plan is referred to as the "seven year nightmare."
With smaller rival T-Mobile entering into an agreement to buy MetroPCS earlier this month, Sprint is feeling the heat of stronger competition from all sides.
Mauk says after a disastrous merger with Nextel, the launch of an expensive 4G- LTE network and the growth of competitors AT&T and Verizon, the company needed a miracle.
In comes Japanese mobile phone company Softbank, with enough capital to beef up service.
"It could be a good fit, in terms of resources and experience with LTE networks as Sprint tries to beef up operations to compete with the big two."
Sprint is $21 billion in debt. Mauk says the company needs deep pockets to make up for some questionable business decisions, like the company's failed merger with Nextel.
Sprint also chose the Blackberry as its top phone offering, instead of the wickedly popular Apple iPhone. The company has continued to lose money, despite finally adding the iPhone to its network last year.
As for Sprint's 7,500 employees in Overland Park, experts say initial reports will keep jobs from going overseas.
Sprint's new organizational structure will include a 10-member board of directors, including at least three members of Sprint's current board of directors. CEO Dan Hesse will remain in his job and on the board. The company's headquarters will remain in Overland Park.
Softbank made headlines when it became the first Japanese wireless company to carry the iPhone.
The transaction could make Sprint, the third-largest U.S. mobile phone company, a tougher competitor against its bigger rivals, Verizon Wireless and AT&T. Sprint has 56 million subscribers, about half the amount of Verizon Wireless, the leading provider.
SoftBank is Japan's third-largest carrier, and is led by colorful and outspoken CEO Masayoshi Son. The company isn't shy about dealmaking. It owns a stake in social media games company Zynga, had a chunk of Yahoo until last year, and orchestrated a blockbuster deal to buy Vodafone's Japan unit that gave the company a huge presence in the burgeoning wireless space.
Softbank's flair and assertiveness could give Sprint a needed jolt. The company lost its brief marketing edge -- billing itself as the only nationwide network with unlimited data -- when T-Mobile recently reverted to its unlimited data plans as well.
Regulators would likely cheer the deal, which would ensure that four strong, nationwide wireless competitors remain in the U.S. market. In AT&T's scuttled $36 billion buyout offer for T-Mobile last year, regulators said they opposed the deal because it would bring the number of national wireless choices down from four to three.
CNN contributed to this report