We heard all about SoftBank’s desire to purchase a majority stake in Sprint last week, but today, the two companies confirmed the deal. SoftBank will pay out $20.1 billion to take control of a 70% share in Sprint, with $12.1 billion of that going to current Sprint shareholders as consideration for the buyout. The rest of the money – all $8 billion of it – will be given to Sprint as new capital.

Current Sprint CEO Dan Hesse will be keeping his position after the buyout is complete, and Sprint’s headquarters will stay in Overland Park, Kansas. SoftBank has actually opened a subsidiary named HoldCo specifically for this buyout, which will have current Sprint shareholders retaining a 30% stake in the New Sprint. Through HoldCo, SoftBank will own the other 70%.

Not everything with this deal is said and done, however, so SoftBank has put some precautionary clauses in place. If SoftBank can’t complete this acquisition of Sprint, it will give the company $600 million. Likewise, if Sprint accepts a better offer from any other company, it will have to pay SoftBank $600 million, with $75 million going to SoftBank if Sprint’s shareholders reject the buyout offer.

By purchasing 70% of Sprint, SoftBank will be able to give its US operations a significant boost. The deal will also make Sprint, which has been struggling lately, more competitive in the US, as the influx of funding from SoftBank will allow Sprint to beef up its 4G LTE network at a faster pace. Should everything work out as planned, it may not be long before we see Sprint giving the big guys like Verizon a run for their money. You can read more on the buyout by clicking this PDF link.

[via SlashGear]