AT&T announced Friday that it will acquire prepaid wireless provider Leap Wireless in a deal valued around $1.2 billion.
The carrier has agreed to pay $15 a share in cash for Leap, which operates under the Cricket Wireless brand. As part of the agreement, AT&T will get Leap's wireless properties, including its licenses, network assets, and stores, as well as its subscribers, which number around 5 million. AT&T also will keep the Cricket brand.
Leap's wireless network covers about 96 million people in 35 states, according to a statement Friday.
"The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service," according to the press release.
Spectrum in the PCS and AWS bands, mostly complementary to AT&T's spectrum, is also included in the agreement. If the deal is approved, AT&T will put Leap's "unutilized spectrum to use in furthering its 4G LTE deployment and providing additional capacity and enhanced network performance for customers' growing mobile Internet usage," according to the release.
Leap Wireless has no doubt been feeling greater competitive pressure as of late. In May, T-Mobile USA -- which has been getting attention for its no-contract plans -- completed its merger with MetroPCS.
Leap's stock closed at $7.98, up 20 cents a share, on Friday.
AT&T expects the acquisition, which is subject to review by the Federal Communications Commission and the U.S. Department of Justice, to close in six to nine months.