From the Verizon Press Release:
Verizon announced today that it has entered into an agreement with America Movil to acquire Tracfone, the leading pre-paid and value mobile provider in the U.S. The acquisition expands Verizon’s portfolio into the value segment, bringing enhanced access to its industry-leading wireless network and comprehensive suite of mobility products and services to a new customer base.
Tracfone is the largest reseller of wireless services in the US, serving approximately 21 million subscribers through a network of over 90,000 retail locations nationwide. A longtime partner of Verizon, more than 13 million Tracfone subscribers currently rely on Verizon’s wireless network through an existing wholesale agreement.
Following the acquisition, Verizon expects to bring its award-winning 4G LTE and 5G networks and other innovative technologies to Tracfone customers, further develop Tracfone’s distribution channels, and expand Tracfone’s market opportunities.
The acquisition of Tracfone aligns with Verizon’s growth oriented Network as a Service strategy, and will provide more U.S. consumers seeking value wireless plans with improved experiences and enhanced services, including fixed wireless residential broadband solutions, 5G access and expanded international calling and roaming options. The portfolio of Tracfone brands creates a platform for growth and innovation in Verizon’s support of the value and low income segments. Verizon will continue to offer Lifeline service through Tracfone and further develop its core brands, products and distribution channels, including StraightTalk, the vast majority of whose customers operate on the Verizon network today.
The consideration for the transaction will include $3.125 billion in cash and $3.125 billion in Verizon common stock, subject to customary adjustments, at closing. The agreement also includes up to an additional $650 million in future cash consideration related to the achievement of certain performance measures and other commercial arrangements.
Verizon expects to drive significant benefits and network synergies from the transaction. Verizon expects the transaction to be accretive in the first full year following closing, excluding transaction and integration costs, and does not expect the transaction to materially impact capital expenditures.
The transaction is subject to receipt of regulatory approvals and other customary closing conditions. Verizon expects the transaction to close in the second half of 2021.
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One comment on “VERIZON TO BUY TRACFONE”
[…] Verizon lost 50,000 prepaid subscribers after showing positive numbers in Q2 and Q3. However, we think they’ll be OK on the prepaid side this year, most likely gaining a few million overall. […]