Sprint Nextel-Virgin Mobile deal gets FTC's OK
WASHINGTON (AP) – The Federal Trade Commission has removed a regulatory hurdle to Sprint Nextel Corp.'s proposed $483 million acquisition of Virgin Mobile USA Inc.
FTC regulators approved an early termination of the agency's antitrust review, indicating they have no objections to the deal, according to a posting Monday on the FTC's Web site.
The transaction announced July 28 still requires approval from the Federal Communications Commission, since Virgin Mobile holds international licenses that need to be transferred, according to a research note Monday from Stifel Nicolaus analysts Rebecca Arbogast and David Kaut.
The analysts said that while they expect the FCC review "will take some time," they doubt it will pose "a serious obstacle."
Sprint Nextel already owns 13.1 percent of Virgin Mobile, which uses Sprint's network to offer service and has 5.2 million subscribers. The transaction would allow Sprint to expand in the fast-growing market for prepaid cell phone service.
Like other prepaid vendors, Virgin Mobile primarily targets customers who lack the credit or income to sign long-term contracts or simply want a bargain over contract-based plans. Sprint has 49.1 million subscribers, including those using the network through wholesalers like Virgin Mobile.
Shares of Sprint fell 7 cents to close earlier at $3.83. Shares of Virgin Mobile finished down 9 cents at $4.81.