Sprint finalizes $40 billion financing for T-Mobile merger

June 20, 2014

JAPAN-US-TELECOM-SOFTBANK-FILES JapanTimes

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:

  1. JPMorgan Chase & Co,
  2. Goldman Sachs Group,
  3. Deutsche Bank AG,
  4. Bank of America Merrill Lynch,
  5. Citigroup,
  6. Mizuho Financial Group,
  7. Bank of Tokyo-Mitsubishi UFJ and
  8. 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.

net-customer-additions-postpaid-t-mobile-at-t-sprint-verizon_chartbuilder-2 Quartz

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.

Comments

  • J_Pod

    Please no!!!

    • K

      Why? If it does get approved apparently T-Mo will be the surviving brand with Legere still at the helm. Separately, these two can’t take on ATT and Verizon.

      • Arturo Raygoza

        Oh god another one of these guys, competition isn’t centralizing monopoly’s even closer. And nothing good can happen to T-Mobile, sprint has all to gain.

        • Kelly

          In my area, T-Mobile is crap, nothing but Edge service and almost nothing to speak of as far as indoor voice coverage. I think this is needed, Sprint has tons of LTE spectrum, and T-Mobile has faster 3G in most areas combined they would be a powerful network especially if future phones used all technologies used by the 2 companies CDMA and GSM. I know a lot of the Sprint phones already support GSM bands used by T-Mobile for Global usage, they are just disabled in the US right now.

          • Arturo Raygoza

            You know if we had all carriers unite together we would have one super strong carrier with service every where! Oh yeah think of how easy it would be if the entire USA was on one super super simple plan!

          • Corbin Crutch

            And they could jack the prices as high as they wanted and screw EVERYONE! :D

          • Noel

            Enjoy the low prices now cuz that will be the end if by any chance this is approved. U will welcome your new masters..the GREEDY THREE…hold on to your wallets folks

          • Corbin Crutch

            Oh yeah, I know that. TMobile can’t come out on top of this in any other way than the deal breaking

          • smokebomb

            For only $400 a month since it would be a monopoly!

          • Guest123

            Yes, and that is what proper government does — controls and regulates *necessary* utilities for the benefit of the people — we should have only ONE major wireless carrier owned by the people of the USA (government). However, the US government no longer likes that and also forces other countries to sell off their utilities to private companies, and G.W. Bush signed an executive order telling states/municipalities to sell everything to private business.

            Remember, in the US the people are the government and own what the government owns, thus the government NOT owning *necessary utilities* and allowing private business to monopolize those utilities and gouge consumers is insane.

            Yes, I know government runs things like crap, but that’s another topic.

          • Arturo Raygoza

            Wrong, we, us, me and you are NOT the government. The idea of a government from the people by the people has not existed for a very long time, ever since they began trampling all over the constitution. Now it is the oligarchs versus the surfs, looking at it in any other way is self diluting.

            But to address your argument, let’s look at electricity, government let it become a monopoly and the cost has gone north ever since every year more and more and if you cant afford it and go without you get cps kidnappings your children.

          • Guest123

            While the current government may behave like an oligarch that does not change the foundation of the U.S.A. Nor what “we the people” really means. It is up to “the people” to take it back, not go along with things like this and say, well I would rather not have a merger, etc. . . instead of, “they are our air waves and we are taking them back under one unified carrier, etc.” Americans need to pull their head out of their ass, otherwise all this chit chat is a for nothing anyways, as there will be more an more monopolies OKed by the government.

          • Arturo Raygoza

            You are saying government monopolies are better than private monopolies. I’m saying I don’t want ANY monopolies.

          • Guest123

            If you look at any proper government “monopoly” of utility systems you will find they work very very well for the people — much better service at much better prices. Until the US says it is not in their national interest and goes down to said country and overthrows the president to put in their puppet that then sells everything off — yes, the US government has done exactly this.

            And while you man not want any monopolies, that does NOT happen in societies — either the government controls it or business will, and when business controls government, etc. . . you see the outcome.

            American’s no longer know what proper government is, and making an argument from the current state of our gov as the foundation of said argument is not a valid argument. The government of the USA can be as good as the people want it to be, as could those “government monopolies.” However, that would require Americans to become informed, stop being lazy about government, etc. . . so, it ain’t happening anytime soon.

          • Arturo Raygoza

            Read my edited post up above.

          • Guest123

            Things could be good in the USA. . . but that requires informed citizens. Corporations and government are balls deep on each other, screwing us all over at every opportunity and the average person is too busy buying Starbucks to give a crap. /rant
            :-)

          • Arturo Raygoza

            And this is the government you want to give more power to? Good point man ;)

          • Guest123

            lol. . .

            No, my point is that Americans need to wake up, get informed, take back the government and necessary utilities. Americans are NOT in control of their government at this point in time, thus it is all just chit chat.

          • Arturo Raygoza

            Let me know when that happens then we can talk about giving government more power

          • http://facebook.com/icecowboy Maynard K

            The federal gov’t itself is becoming the monopoly de tutti monopoly… …as more and more things that used to be left to lower levels of local gov’t become “federalized.” So with that stipulation, yeah….. …in the Teddy Roosevelt’s term, let’s break up the Trusts – and especially the one in DC…..

          • http://facebook.com/icecowboy Maynard K

            Some typos are funnier than others. And I make ‘em both by accident and on purpose myself, but FTR, it’s “serfs” and “self-deluding”… …Still, I like the imagery of the “oligarchs vs. the surfs” (with the last stand on some beach in SoCal! Hang Ten, Joe Biden….) … and there must be something in the uni that’s “self diluting.”

          • Arturo Raygoza

            I knew it was typed wrong when I wrote it but the.point was still clear, and still stands true.

          • http://facebook.com/icecowboy Maynard K

            Not tryin’ to call you out at your expense. Oh well, maybe I was, but nothing malicious intended… …’scuse, pls.

          • Arturo Raygoza

            Cool

      • Noel

        They don’t have to be AT&T or Verizon’s size to be successful.

    • J Smith

      Sprint = Malware! I red the FCC wants 4 major carrriers! Sprint is an infected parasite loooking for another carrier to take on it’s antiquated “carrier iq” poisened network!

      • Anonymous

        What? All of the carriers are involved with Carrier IQ and what’s that got to do with this article?

  • me_

    My question: SimI or CDMA? Or just spectrum?

  • Arturo Raygoza

    Banks number 1 2 and 4, of course they would be behind this.

    • smokebomb

      Cuz they’re the biggest crooks in the banking industry.

    • EvenInTheDarkestHour

      And 5. Yeah, I was thinking that same thing.

  • Jayfeather787

    GSM or CDMA?

    • smokebomb

      I read T-Mobile would actually be the controlling company, but of course that was a few weeks ago and it was a rumor. If they stay CDMA I’m going to an MVNO and never paying these fuckin monopolies/duopolies a directly again. The FCC has fucked the consumer letting Verizon and ATT eat all the start up competition. This would just be the nail in the coffin.

      • Corbin Crutch

        PLEASE LET THIS BE THE CASE!!!! Otherwise I’m jumping ship on TMobile

      • Arturo Raygoza

        Rumors, but even if that is the case it still shouldn’t happen

  • Danny H

    Makes sense.

  • smokebomb

    Here’s hoping the deal fails and T-Mobile gets their 2 billion dollar payout.

    • http://joesspot.wordpress.com/ Joe Martinson

      Why not hope they stick to the T-Mobile plans and policies and merge networks for better coverage?

      • smokebomb

        1) only having 3 big carriers is worse than 4 big carriers

        2) the payout would go toward T-Mobile’s infrastructure

        3) sprint sucks and we don’t know which one will be the controlling company yet.

        4) it just shouldn’t happen

        5) rates will probably go up. They always do after a merger because the telecoms are under regulated.

        • Corbin Crutch

          THANK YOU! SOMEONE HERE GETS IT

        • pervbear

          Well son already said john would be the controlling figure and its said the sprint might drop their name maybe use it for something else. So if john could keep his roll going it would be interesting.

          • Arturo Raygoza

            Even if this rumor is true it should NOT happen

          • Noel

            They will say whatever they think will help them get it approved so as to divert the opposition to this competition killing buyout. I say let there be four…the BIG FOUR NETWORKS so as to preserve vibrant competition.

    • Exare

      It feels like that’s what they’re really shooting for with all these “merger” deals. First with ATT a deal falls through and they got tons of free cash. Now Sprint’s up next to take a beating. It just seems weird, but very clever of T-Mobile if that’s what they’re doing.

      On a side note, if they had coverage where I lived/traveled I’d be with them without a doubt. Too bad their coverage bllloooooooowwws.

      • Noel

        U make it seem like Tmobile goes out of its way to look for a buyout. On the contrary these greedy-looser carriers who can not innovate or disrupt the cellular market positively go out of their way to spend Billions so as to take Tmo off the playing field. Just as At&t failed to take off a competitor, i hope Sprint fails as well. Instead of them spending all those billions to improve their Network, their very slow 4G LTE and also give their customers a price break…they’ve focus their efforts on trying to buyout the only Network doing their utmost to shake up the cellular/mobile market space in a positive way by lowering the cost to the consumer. I hope the FCC and DOJ together with the power of the masses will make sure this competition squashing buyout doesn’t happen despite the back slapping by some involved. KEEP THE FOUR MAJOR NETWORKS instead of creating THE GREEDY THREE

        • Exare

          I like you.

  • CHRIS

    C’mon DOJ and FCC SHOOT IT DOWN IMMEDIATELY!!!!!!!

    • Noel

      I say SHOOT IT DOWN NOW b4 it even gets on the runway. It will be A BIG BLUNDER to let this thing to take flight. Any consumer who has the foresight to visualize what a trio of Greedy Networks will do to the US cellular market should stand up now and make their voices heard before the avalanche of spiking prices in a few years after this thing is given the green light. Say No right now before the impending reality of only three big carriers who might collude to dig deep in our pockets and erase the positive gains to the consumer courtesy of Tmobile’s disruptive moves.

  • pervbear

    At this point only 3 will survive anyway, sprint can’t keep up and the way john has been bringing major attention to the brand (not always good but mostly good). Already said John would run the company, I’d rather a T-Mobile merger with sprint with the T-Mobile brand and mindset over sprint failing and being spread out between everyone or just sitting there to rott as an mvdo nightmare.

    • Arturo Raygoza

      Let them fail and the customers will go to T-Mobile, they already are in many cases. That is the natural capitalistic way

      • Mark

        If you just let Sprint fail, you’ll still be at just 3 major competitors.

        • Arturo Raygoza

          You don’t know that. A new completely different company can buy them out, restructure them and put them back in the green. That’s capitalism without government intervention the way its supposed to be.

          • Richard Sequeira

            There was a time in US history in which free markets sold milk with lead, rotten meat, and cough syrup made with opiates….

          • Arturo Raygoza

            Lmao yeah cause rotten meat is the same exact thing as two giant corporations merging to create an abomidable mega corp.

          • Richard Sequeira

            You didn’t understand the comment, if the free market decided what’s “best” for the consumers, it will end up harming everybody. Three big carriers is a bad idea. That can possibly mean more restrictions on phones and other mobile devices.

          • Arturo Raygoza

            Look, I don’t care what problems you blame on the free market but in this case, its needed

          • Richard Sequeira

            So you’re agreeing that more restrictions on what the end-user can do with their devices? As might as well support a monopoly charging you $400 a month.

          • Arturo Raygoza

            No I’m not.

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  • Amadeus Klein

    Sprint needs to buy T-Mobile, and immediately put the T-Mobile management team in place removing the sprint team and change the name of the combined company to T-Mobile… That’s the winning buyout strategy…

  • EvenInTheDarkestHour

    Call me crazy, I think a merged Sprint/TMo could be a good thing, especially if the rumors of using TMo model, management, et al, is true. I believe what TMo has moved to is the direction is how we transition to a more reasonable mobile service business model. But… Time will tell.

    • Arturo Raygoza

      Who is spreading all these rumors??? I’ve read that NOWHERE.

      • EvenInTheDarkestHour

        The internet, Google, Bing, what have you, is your friend. You might even start looking up one of the companies involved. You know, for a START (pesky caps lock key).