Last week, there were reports that Softbank was about to acquire Sprint Nextel, and today, the companies made it official.

Softbank and Sprint Nextel announced that they have entered into an agreement in which Softbank will invest $20.1 billion in Sprint. $12.1 billion will be paid to Sprint shareholders, and $8 billion of new capital will be used to “strengthen Sprint’s balance sheet,” among other things.

Softbank will own the 70% majority of Sprint Nextel, which will be known as “New Sprint”. Softbank says the acquisition enables it to establish an operating base as one of the largest mobile Internet companies in the world, and that the combined subscriber base will be one of the largest between the U.S. and Japan. Its combined mobile telecom revenue will rank third in the world.

Sprint, meanwhile, will have plenty of money for strategic investments, and its mobile network.

Softbank Chairman and CEO Masayoshi Son said, “This transaction provides an excellent opportunity for Softbank to leverage its expertise in smartphones and next-generation high-speed networks, including LTE, to drive the mobile Internet revolution in the world’s largest market. As we have proven in Japan, we have achieved a V-shaped earnings recovery in the acquired mobile business and grown dramatically by introducing differentiated products and innovative services to an incumbent-led market. Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American mobile market.”

Sprint CEO Dan Hesse added, “This is a transformative transaction for Sprint that creates immediate value for our stockholders, while providing an opportunity to participate in the future growth of a stronger, better capitalized Sprint going forward. Our management team is excited to work with Softbank to learn from their successful deployment of LTE in Japan as we build out our advanced LTE network, improve the customer experience and continue the turnaround of our operations.”

The deal has been approved by both Boards of Directors, though it is still subject to shareholder approval, as well as regulatory approval. The companies expect it to close in mid-2013.