Verizon Communications Inc. Has agreed to buy TracFone Wireless Inc. From America Movil SAB for $6.25 billion, as the largest U.S. Wireless carrier seeks to expand its mobile business into the so-called prepaid market.
Verizon will pay $3.125 billion in cash and $3.125 billion in stock, with as much as $650 million additional tied to performance goals. TracFone, a U.S. Prepaid mobile service, is a subsidiary of Carlos Slim Domit’s Mexico-based America Movil wireless. It’s the largest U.S. Prepaid service, with 21 million subscribers.
The acquisition comes as Verizon faces new pressure from an enlarged T-Mobile US Inc., which concluded its merger with Sprint Corp. Earlier this year. T-Mobile has 20.6 million prepaid subscribers, with the largest group under the Metro brand. AT&T Inc. Has 18 million prepaid subscribers, most under its Cricket brand.
Though Verizon is the largest wireless carrier overall, with 116 million regular monthly subscribers, it has only 4 million prepaid customers.