T-Mobile, Sprint reportedly hash out terms to bring merger closer

The two wireless carriers agreed that Deutsche Telekom, Bellevue-based T-Mobile’s parent, would have control in a combination of the two companies, said a person with direct knowledge of the matter. But any deal is still weeks away, the person added.

Sprint and T-Mobile US, in preliminary deal talks since at least August, agreed that Deutsche Telekom would have control in a combination of the two companies, said a person with direct knowledge of the matter.

The mobile operators are discussing a stock-for-stock merger, though are still weeks away from an agreement, according to the person, who asked not to be identified because the talks are private. 

Shares of Sprint and Bellevue-based T-Mobile rose Tuesday. Both companies declined to comment.

Deutsche Telekom would put T-Mobile executives, led by Chief Executive Officer John Legere, in charge of the combined company, the person said. That’s important for the German carrier, which owns about 64 percent of T-Mobile and has come to rely on it as a key driver of sales and earnings growth, according to a second person familiar with the talks. It favors a deal with Sprint because potential savings could come relatively quickly, the person said.

Most Read Stories

Unlimited Digital Access. $1 for 4 weeks.

The idea of a combination between the No. 3 and No. 4 carriers was shot down by regulators in 2014, but with a new administration, preliminary discussions picked up earlier this year. Washington, D.C., regulators appointed by President Donald Trump haven’t signaled an insistence on maintaining a four-player nationwide wireless market that was a feature of the preceding administration.

“Such a deal would take at least a year to get approval and there is much logic on announcing a transaction before the November 2018 election cycle,” Jennifer Fritzsche, a Wells Fargo analyst, said in a note.

T-Mobile shares climbed 5.9 percent to $65.42 at Tuesday’s close, while Sprint surged 6.8 percent to $8.20. CNBC reported Tuesday details of the Sprint and T-Mobile talks.

Sprint has posted losses for a decade, even after SoftBank bought control in 2013 and returned the company to subscriber growth. As of June 30, the mobile operator had more than $12 billion in debt coming due in the next three fiscal years, putting pressure on SoftBank, led by billionaire Masayoshi Son, to find a partner.

Several issues stand in the way of a deal, according to people familiar…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *