Reuters is reporting that Sprint has lined up financing for its proposed acquisition of T-Mobile. Sprint has been talking to eight different banks that are willing to help finance the deal. The merger would put together the third and fourth largest mobile operators in the US.
The financing terms will be finalized in the next month or so with the merger’s formal announcement expected in August. The buyout is valued at approximately $50 billion.
The following banks have agreed to finance the acquisition:
- JPMorgan Chase & Co,
- Goldman Sachs Group,
- Deutsche Bank AG,
- Bank of America Merrill Lynch,
- Mizuho Financial Group,
- Bank of Tokyo-Mitsubishi UFJ and
- Sumitomo Mitsui Financial Group
Sprint will take on more than $40 billion of debt. The financing package with the banks include a bridge loan of nearly $20 billion from SoftBank and another $20 billion to refinance T-Mobile’s existing debt.
Three years ago, regulators rejected AT&T’s agreed $39 billion bid for T-Mobile, which resulted in AT&T paying T-Mobile a reverse break-up fee of $6 billion in cash and U.S. mobile assets. The reverse breakup fee that Softbank would have to pay T-Mobile is reported to be about $2 billion.