Sprint to pay $32 billion to buy T-Mobile US, source says

“Sprint Corp has agreed to pay about $40 per share to buy T-Mobile US Inc, a person familiar with the matter said, marking further progress in the attempt to merge the third and fourth-biggest U.S. mobile network operators,” Paritosh Bansal and Harro Ten Wolde report for Reuters. “The $40 price represents a 17 percent premium to T-Mobile US’s closing share price on Wednesday, giving it a valuation of more than $32 billion and the shares have more than doubled in price since the group bought smaller rival MetroPCS a year ago.”

“Hannes Wittig, an analyst at JP Morgan, said the $40 price, if confirmed, seemed low. ‘T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control … Somewhere in the high 40s would be more appropriate,'” he said,” Bansal and Ten Wolde report. “Japan’s Softbank, which owns Sprint, and Deutsche Telekom, which owns 67 percent of T-Mobile, still have to negotiate on the details, including financing and the termination fee to be paid should the merger get blocked by regulators, the source familiar with the matter said.”

“Analysts see the regulatory challenge as the biggest hurdle facing the companies since both the U.S. Federal Communications Commission (FCC) and Department of Justice (DOJ) have expressed a desire to have at least two more network operators competing against the market leaders AT&T and Verizon,” Bansal and Ten Wolde report. “Three years ago regulators rejected AT&T’s agreed $39 billion bid for T-Mobile US, which resulted in AT&T paying Deutsche Telekom as T-Mobile’s full owner a reverse break-up fee of $6 billion in cash and U.S. mobile assets. Under the proposed sale to Sprint Deutsche Telekom is expected to keep a 15 to 20 percent stake in the combined company, the source said.”

Much more in the full article here.

11 Comments

  1. This is all crap. The #3 carrier to buy the #4 carrier when Sprint is only a little larger then TM but in worse financial condition. If Sprint can’t take care of their own house then you can’t expect them to care take of someone else.

    This will just set a scenario for Sprint/TM to fail later down the road and then be in a situation to be bought by AT&T or Verizon. No competition. The govt will never allow this to happen. And as for Duche telecom, if they want out, why don’t they sell it to TM America.

  2. Having lived in Japan many years and having seem what old Masayoshi has done for Japan’s cell market, I think he, Masayoshikun, will not tolerate sub par performance on anything his name is associated to. Maybe we shall see. One thing for sure, in America, we sure tolerate slow speeds for both cell and internet.

  3. I hope to heaven this is not true. I hate Sprint as does everyone I know who’s on it. Meanwhile, I love T-Mobile. How can it possibly make any sense for consumers?

  4. Sprint does not allow any unlocking of iPhones sold through them (on contract). T-Mobile does not lock iPhones at all, and you can use them on any network. How will they reconcile the two?

  5. The FCC Should never allow this the Happen, and i think they won’t because they did not allow the AT&T merger either.
    Without T-Mobile being the #4 Carrier, we would not have the kind of Competition and Creative Plans that we so cherish today. (Uncarrier Anybody). Think things are bad today, Imagine 40 Million More Customers on Sprint.

    (Say Hell no to the T-Mobile/Sprint Merger)

  6. Damn, I was waiting to get an iPhone 6 with hopefully a slither bigger display on that 5GB/month for $30/month T-Mobil deal they’ve been offering. I get this goes away…

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