US operator AT&T has agreed to acquire prepaid wireless rival Leap Wireless for around $1.2bn in cash. In total, the operator will spend $15 per share on Leap’s stock and wireless assets, including spectrum licenses, network equipment and retail stores.

The acquisition includes spectrum in the PCS and AWS bands covering 137 million people which AT&T said is largely complementary to its own existing spectrum licenses. AT&T plans to put Leap’s unutilised spectrum – which covers 41 million people – to use in furthering its 4G LTE deployment and providing additional capacity and enhanced network performance for customers. Owners of approximately 29.8 per cent of Leap’s outstanding shares have already voted in favour of the transaction, according to AT&T.

AT&T’s bid to boost its spectrum holdings was dealt a blow when the firm’s planned $39bn acquisition of competitor T-Mobile collapsed in December 2011. That deal was blocked by the FCC and the Department of Justice, over concerns that it would restrict competition in the US mobile market, and left AT&T with nothing to show for the $4bn breakup fee it was obliged to pay T-Mobile.

Ranking number two in the US market, AT&T currently has 108 million subscribers, as of June 2013, according to Informa’s WCIS, dwarfing Leap’s 4.9 million subscribers. And as of April 15, 2013, Leap had $2.8bn of net debt.

Leap’s network covers approximately 96 million people across 35 US states. It operates a 3G CDMA network, under the Cricket brand, as well as a 4G LTE network covering 21 million people. The operator  has 3,400 employees.

AT&T said it will retain the Cricket brand name, provide Cricket customers with access to AT&T’s LTE network, utilise Cricket’s distribution channels, and expand Cricket’s presence to more cities.

The operator believes the move will result in increased competition, better device choices, improved customer care and an enhanced mobile internet experience for consumers on low-cost prepaid wireless plans.

Under the terms of the deal, Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap’s 700 Mhz “A Block” spectrum in Chicago, which Leap purchased for $204m in August 2012.

The transaction is subject to review by the FCC and DoJ, and AT&T expects the transaction to close in six to nine months.