Sprint, T-Mobile set to announce a $26 billion merger
T-Mobile is closing in on a deal to merge with
Sprint that will value Sprint near its current market price of $6.50 per share, according to people familiar with the matter.
The $26 billion deal could be announced as soon as Sunday, said the people, who asked not to be named because the negotiations are private. No deal has been signed and talks could still fall apart, said the people. The sides have agreed on an exact exchange ratio, although that figure couldn't immediately be determined.
SoftBank, which owns about 85 percent of Sprint, will allow Deutsche Telekom, which owns almost two-thirds of T-Mobile, to consolidate the new company's earnings, said the people.
A deal, if reached, would conclude several years of negotiations between the companies. Talks most recently broke off late last year after SoftBank CEO Masayoshi Son decided he didn't want to lose control of a combined company.
Several things changed over the last few months that led Son to change his mind, including greater synergies from lower corporate taxes, an increased understanding of how much 5G deployment will cost Sprint, and a rapidly changing competitive wireless landscape that now includes cable providers, the people said. Last week,
Comcast and
Charter, the two largest U.S. cable companies, announced an extended partnership agreement that will allow each company to develop products and services.
A deal announcement doesn't mean a merger will actually happen. Combining the third- and fourth-largest wireless U.S. providers in a market with only four participants — Verizon, AT&T, T-Mobile and Sprint — could be a hard sell for U.S. regulators. AT&T attempted to buy T-Mobile in 2011, only to have regulators block it on anti-competitive grounds.
its official now
Edit: Sprint and T-Mobile have announced that they will merge
The number of major wireless carriers in the United States could shrink from four to three. Sprint and T-Mobile
have announced that they intend to merge. The merger will need to be approved by regulators and the company’s shareholders.
The combined company will be based in Bellevue Washington and will be called T-Mobile. Current T-Mobile CEO John Legere will run the combined company, while T-Mobile COO Mike Sievert will become the new company’s COO and President. T-Mobile’s majority owner Deutsche Telekom will hold a 42 percent stake in the company, while Sprint majority owner SoftBank will hold 27 percent. Sprint CEO Marcelo Claure and SoftBank CEO Masayoshi Son will sit on the combined company’s board.
The companies say that by combining, they’ll be able to lower prices and take advantage of “greater economies of scale”. The two companies have trailed their larger rivals, AT&T and Verizon, and the merger between Sprint and T-Mobile will help give them a boost as they begin to deploy their next-generation 5G network across the country.
The merger comes after years of on-and-off talks between the two companies. Sprint
had been prepared to buy T-Mobilein 2014, but those talks didn’t go anywhere. The two companies
resumed those talks in May of last year,
came closein September to reaching a deal, only for
Sprint to call them off in October. T-Mobile then
made its own offer in November, but
that quickly collapsed as well. The talks resumed again
earlier this month, and on Friday, CNBC said that the two were closing in on a merger
to the tune of $26 billion.
While the two companies have agreed to merge, they still have an uphill battle before that actually happens: the deal will have to be cleared by regulators, who might not be happy about the smaller number of carriers. In 2011, a planned merger between AT&T and T-Mobile attracted fierce resistance from regulators, and was ultimately canceled.
I was thanking God GPS on my phone still worked
