Verizon has entered into an agreement with Mexican telecommunications company America Movil to acquire Tracfone, a pre-paid and value mobile provider in the U.S.

The transaction price is pegged at $3.125 billion in cash, with an additional $3.125 billion in Verizon common stock; or over $6 billion. The agreement also includes an additional $650 million in future cash considerations.

Tracfone is a reseller of wireless services in the US, serving approximately 21 million subscribers through a network of over 90,000 retail locations nationwide, according to a statement by Verizon. The company has been a Verizon partner; with more than 13 million Tracfone subscribers using its wireless network through an existing wholesale agreement, says Verizon.

The Tracfone Verizon transaction is subject to receipt of regulatory approvals and other customary closing conditions. Verizon expects the transaction to close in the second half of 2021.

Credit Suisse acted as financial advisor to Verizon and Debevoise & Plimpton acted as legal advisor.

[Image courtesy: Tracfone]