T-Mobile, Sprint on the cusp of merger agreement

27 Apr 2018

US mobile operators T-Mobile US and Sprint are expected to unveil a merger agreement next week, Reuters reports, following a significant breakthrough in discussions between their respective parent companies, Deutsche Telekom (DT) and SoftBank Group Corp. According to the news agency, which cites two sources familiar with the transaction, the two parties are fine-tuning an agreement that will dictate how they exercise voting control over the combined company. This will allow DT to consolidate the enlarged operator on its books, without owning a majority stake. In addition, the companies are in the process of finalising the debt financing package that they will use to fund the deal, the sources said.

As previously reported by TeleGeography’s CommsUpdate, the most recent round of negotiations were abandoned in November 2017, as the companies were unable to find mutually agreeable terms. People briefed on the discussions said that SoftBank owner Masayoshi Son and Sprint CEO Marcelo Claure rejected the merger terms set out by DT, because they did not give SoftBank and Sprint enough control over the combined entity.

Back in June 2014 Sprint unveiled a USD32 billion (USD40 per share) offer for T-Mobile US. The deal, which would have seen the German company retain a roughly 15% to 20% stake in the combined company, was eventually abandoned by SoftBank, after a hostile reception from the US authorities.

United States, Deutsche Telekom (DT), SoftBank Group Corp, Sprint Corporation (now part of T-Mobile US), T-Mobile US