Sprint Nextel (S) has reportedly completed the acquisition of its wireless affiliate iPCS Inc. (IPCS), thereby ending the long legal battle with the affiliate. This follows the recent approval of the transaction by the US telecom regulator Federal Communications Commission (“FCC”) and the Public Service Commission of West Virginia.

Under the agreement terms, Sprint has acquired all outstanding shares of iPCS for $24 each. Third-largest US wireless carrier made a cash payment of approximately $426 million for the acquisition and assumed $405 million in iPCS net debt.

With the closure of the deal, iPCS has become a wholly-owned subsidiary of Sprint. The transaction represents the latest in a series of acquisitions of its affiliates by Sprint. Acquisition of iPCS leaves just two remaining affiliates (out of the original ten), Swiftel and Shentel. Both of them are small privately-held operators with limited subscriber base.

Based in Schaumburg, Illinois, iPCS offers wireless services under the Sprint brand across 81 markets in several Midwestern states. iPCS has been in litigation since 2005 as it continued to sue Sprint on the carrier’s acquisition activities including the purchase of Nextel’s business, 51% stakeholding in Clearwire Corp. (CLWR) and the recently concluded acquisition of Virgin Mobile USA .

iPCS has argued that these investments have violated its affiliate agreements with Sprint. The company has also demanded the divestiture of Nextel’s iDEN wireless networks in specific iPCS markets. The acquisition, therefore, allows the companies to end all the pending litigations between them and Sprint will no longer be required to divest any of its network assets.

The acquisition has expanded Sprint’s direct service territories by providing access to an additional subscriber population of 12.6 million. Moreover, Sprint has broadened its direct customer base with iPCS’s more than 700,000 wireless subscribers and 270,000 wholesale customers. The transaction is also expected to offer Sprint approximately $30 million in annual synergies and will be accretive to free cash flow in 2010.

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