WASHINGTON -- Sprint Nextel said Monday it had reached a deal to acquire the rest of fellow wireless carrier Clearwire for $2.2 billion.
The acquisition, which must be approved by federal regulators, would expand Sprint's holdings of wireless spectrum to help it compete with larger rivals AT&T and Verizon Wireless. Sprint is the nation's third-largest carrier.
"Today's transaction marks yet another significant step in Sprint's improved competitive position and ability to offer customers better products, more choices and better services," said Chief Executive Dan Hesse.
"Sprint is uniquely positioned to maximize the value of Clearwire's spectrum and efficiently deploy it to increase Sprint's network capacity," he said.
Sprint's stock was down slightly in early trading Monday.
Sprint already owns about 51% of Clearwire. Sprint offered $2.60 a share for the remainder of the company last month, and on Thursday upped that to $2.90 a share. That bid was worth $2.1 billion.
Sprint sweetened the offer to $2.97 a share to secure the deal, the company said Monday.
Clearwire's board unanimously agreed to accept the new offer, the company said.
"Our board of directors has been reviewing available strategic alternatives over the course of the last two years," said Clearwire Chief Executive Erik Prusch. The board decided that accepting the latest Sprint offer is 'the best path forward,'" he said.
The $2.97-a-share offer is 128% the value of Clearwire's stock in early October, before word hit the markets that Japanese wireless carrier Softbank Corp. was in discussions to acquire a majority stake in Sprint.
It was widely assumed that Softbank's acquisition of Sprint, which was announced Oct. 15, would also include a buyout of Clearwire to provide additional U.S. airwaves.