Verizon to acquire US prepaid wireless provider Tracfone Wireless from America Movil
Telecommunications conglomerate Verizon has agreed to acquire Tracfone Wireless, a prepaid wireless provider in the US, from Mexican telecommunications corporation America Movil in a deal worth up to $6.9 billion.
The acquisition is said to grow the portfolio of Verizon into the value segment, bringing improved access to its wireless network and suite of mobility products and services to a new customer base.
Tracfone is among the largest resellers of wireless services in the US, catering to nearly 21 million subscribers via a network of more than 90,000 retail locations in the country. The pre-paid mobile phones provider has been a longtime partner of Verizon with over 13 million of its subscribers presently depending on the latter’s wireless network via an existing wholesale agreement.
After the acquisition, Verizon expects to bring its 4G LTE and 5G networks and other innovative technologies to the customers of Tracfone, further develop the latter’s distribution channels, and grow its market opportunities.
Hans Vestberg – Chairman and CEO of Verizon said: “This transaction is aligned with what we do best: providing reliable wireless service alongside a best-in-class customer experience.
“We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market. We are pursuing this important strategic acquisition from a position of strength given our very strong and prudent financial profile.”
The consideration for the deal comprises $3.125 billion in cash and $3.125 billion worth Verizon shares. The deal also includes up to an additional $650 million in future cash consideration based on the meeting of some performance measures and other commercial arrangements.
The deal, which is subject to regulatory approvals and the meeting of other customary closing conditions, is expected to close in H2 2021.