Verizon to buy value mobile provider Tracfone from America Movil

Under the terms of the transaction, Verizon will pay $3.13bn in cash and $3.13bn in Verizon common stock. The agreement also includes up to an additional $650m related to the achievement of certain performance measures and other commercial arrangements.

Verizon said on Monday that the deal expands its 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, a long-time partner of Verizon, is the largest reseller of wireless services in the US, serving around 21 million subscribers through a network of over 90,000 retail locations nationwide.

Following the acquisition, Verizon expects to bring its 4G LTE and 5G networks and other innovative technologies to Tracfone customers, further develop Tracfone’s distribution channels, and expand Tracfone’s market opportunities.

It said the deal should drive "significant" benefits and network synergies. It is expected to be accretive in the first full year after closing, excluding transaction and integration costs.

Verizon chairman and chief executive Hans Vestberg said: "This transaction is aligned with what we do best: providing reliable wireless service alongside a best-in-class customer experience.

"We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market. We are pursuing this important strategic acquisition from a position of strength given our very strong and prudent financial profile."