Verizon has announced that it is buying TracFone, the country’s largest prepaid wireless reseller, for $7 billion in cash and stock. Over 13 million TracFone subscribers currently use the Verizon cell network via a reseller deal. The acquisition expands Verizon’s offerings in the low-priced market segment, enabling it to upsell its premium products and services to a new set of customers. Verizon says that the “portfolio of Tracfone brands creates a platform for growth and innovation in Verizon’s support of the value and low-income segments. “

Verizon Chairman and CEO Hans Vestberg tweeted: “We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market.” Tracfone is the largest reseller of wireless services in the US, serving 21 million subscribers through a network of over 90,000 retail locations nationwide.

“This transaction is aligned with what we do best: providing reliable wireless service alongside a best-in-class customer experience,” said Vestberg. “We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market. We are pursuing this important strategic acquisition from a position of strength given our very strong and prudent financial profile.”

Ronan Dunne, Executive Vice President and Group CEO, Verizon Consumer Group added: “Since its launch, Tracfone has developed strong consumer brands and has established itself as a clear leader in the value mobile segment. This transaction firmly establishes Verizon, through the Tracfone brands, as the provider of choice in the value segment, which complements our clear leadership in the premium segment.”

“We’re looking forward to welcoming all of Tracfone’s customers and each of Tracfone’s nearly 850 valuable employees. We are excited to expand our relationship with Tracfone’s distribution partners, and when Tracfone’s customers become part of our family, they will get the best of both worlds – more choices, better services, and new features thanks to Verizon’s investment–but with the flexibility and control that they have come to value with its prepaid plans. Being connected is now more important than ever, and Tracfone customers will benefit from Verizon’s innovations–both now and in the future,” Dunne added.

Verizon is paying $3.125 billion in cash and $3.125 billion in Verizon common stock. The company will also pay up to an additional $650 million in future cash consideration related to the achievement of certain performance measures.