The announcement follows news last week that Deutsche Telekom intended to buy MetroPCS, another US wireless communications group. Both moves underscore the continuing transformation of the US wireless market.

SoftBank, a Japanese telecommunications group, said it would pay 12.1 billion dlrs to Sprint shareholders and make available 8.0 billion dlrs of new capital to strengthen the US company's balance sheet.

The transaction will give SoftBank 55 pc of Sprint's shares outright, while the remaining stock will be converted into shares of a new publicly traded entity, New Sprint. Once the transactions close, SoftBank will hold about 70 pc of Sprint.

"This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE," SoftBank CEO Masayoshi Son said in a press release. He addded that the acquisition "provides a constructive beginning toward creating a more competitive American wireless market.”

SoftBank said the acquisition would allow Sprint to enhance its mobile network and strengthen its balance sheeet. It will also give the US company the benefit of Softbank's expertise in LTE network development and deployment, the Japanese company said

Sprint CEO Dan Hesse said the acquisition would put Sprint in a better financial position to move forward, in particular in the market for faster LTE connectiity.

The transaction has been approved by SoftBank and Sprint directors, but still needs to approved by Sprint shareholders and regulatory authorities. The companies expect closing to take place by mid 2013.

SoftBank was founded by its current chairman and CEO in 1983. It is active in a range of information business areas, including including mobile communications, broadband services, fixed-line telecommunications, and portal services.