T-Mobile & Sprint close to $32 billion merger

June 4, 2014

    sprint-tmobile-merger Amazonaws

    Sprint & T-Mobile have agreed on the broad outlines of a merger valuing T-Mobile at around $32 billion, according to the Wall Street Journal. Under the deal, Sprint would pay around $40 a share for T-Mobile during the summer time. The deal would be roughly 50% cash and 50% stock. T-Mobile’s largest shareholder, Germany’s Deutsche Telekom AG, would retain a stake of 15% to 20% in the new company.

    Any deal will need approval from the Federal Communications Commission and the Justice Department. If allowed, the country’s third and fourth largest wireless operators would merge and leave the country with a significant competitor eliminated.

    Much like the proposed T-Mobile & AT&T merger, Sprint will have to pay T-Mobile more than $1 billion in cash and other assets if the deal is rejected. Considering Sprint has posted losses for the past seven years and is heavily in debt, it would be a massive loss for Sprint if regulators rejected the merger.

    screen-shot-2014-02-14-at-9-02-38-am GeekWire

    Regulators are already weighing cable giant Comcast Corp.’s $45 billion deal to buy Time Warner Cable, agreed to in February, and AT&T’s $49 billion deal last month for satellite broadcaster DirecTV.

    When antitrust authorities rejected AT&T’s $39 billion deal to buy T-Mobile in 2011, they did so because they believed that the U.S. market needed four national carrers.

    Mr. Wheeler told Sprint’s board members that regulators would be wary of further consolidation in the wireless industry. The warning came just weeks after officials in the Department of Justice’s antitrust division told Sprint that their agency had similar reservations. Both agencies would need to clear any transaction between the two companies. The warnings to Sprint mark the latest instance in which U.S. regulators have made it clear that they want to keep four carriers. - Wall Street Journal

    Comments

    • Mario

      Sprint is TRASH!! HOPE IT DOES NOT GO THRU

      • Damon Salvador

        It ll go through as planned . :P .

      • Michael Samsara

        It is a good way for T-Mobile to pick up a little extra cash when it doesn’t go through.

        Why would anyone want to throw a wrench into a company whose model and economic engine is working well – and getting more finely tuned by the day – and risk destroying it?

        T-Mobile should just wait till Sprint reaches the fast approaching point of no return it has been aiming for for so long – and then buy them when they begin bankruptcy proceedings; the FTC and friends could hardly object when the alternative is to put all of those people out of work, and certainly, I can’t imagine them letting Verizon or AT&T buy them.

        Same net effect – one bigger, more powerful company – but not with the blind leading the sighted as it would be if Sprint took the lead.

    • Oli72

      FCC will not allow it. Why. Cause they will raise the price as soon as they merge.

      • Arturo Raygoza

        They wouldn’t risk what they can’t afford had they not already made sure they wouldn’t lose, sadly.

        • dkbnyc

          AT&T thought the same thing.

    • Johannes

      It’s rather questionable if the EU will allow this merge

    • Say What?

      I hope this doesn’t go through for T-Mobile’s sake.

    • http://www.worldofautomobile.com/ Pheonix

      pretty good…From : Car Website

    • dkbnyc

      …This just in… AT&T has agreed to buy T-Mobile… This just in… The Justice Department and the FCC say the merger will not happen… This just… Sprint has agreed to buy T-Mobile… Idiots of the world are under the impression that somehow less competition equals better service and lower prices. Say goodbye to unlimited internet. Say goodbye to reasonable rates. Say hello to the black hole that is Sprint. These fools want to compete with AT&T and Verizon… The only way to do that is to become like AT&T and Verizon.

      • Dominic Rotberg

        Sprint and T-Mobile offer Unlimited Internet…

    • trackREVIVER

      What does this mean for T-mobile userS?

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