Japanese telecom service provider, Softbank Corp has announced on Monday that it will acquire a stake of upto 70 percent in third largest telecom operator in the US, Sprint Nextel Corp in a deal valued at about $20.1 billion.

The amount of $20.1 billion will make it one of the largest international acquisitions by a Japanese firm ever. The deal was announced by Softbank's founder and chief Masayoshi Son and Sprint CEO Dan Hesse at a press conference in Tokyo.

Softbank will buy $3.1 billion of bonds convertible into Sprint stock at $5.25 a share. It will also purchase 55 percent of current Sprint shares for cash at the rate of $7.30 per share. The transactions are expected to completed by mid-2013.

The acquisition will allow Softbank to enter the US market, which is still reporting some growth compared to the stagnation in the Japanese telecom market. The deal will provide enough resources to Sprint Nextel to acquire rivals in the US and also build its 4G network to compete better with its bigger and larger rivals.

“This is pro-competitive and pro-consumer in the U. S. because it creates a stronger No. 3 ... it competes with the duopoly of AT&T and Verizon. When you look at what Softbank has accomplished in Japan with the No. 3 carrier, it's something we can learn from,” said Mr. Hesse.