After several years of on and off negotiations, T-Mobile and Sprint have finally agreed on a merger. Rumors that a deal was nearing completion surfaced last week and came true Sunday morning, sooner than expected.
After several years of on and off negotiations, T-Mobile and Sprint have finally agreed on a merger. Rumors that a deal was nearing completion surfaced last week and came true Sunday morning, sooner than expected.
The deal is an all-stock merger and would leave Deutsche Telekom, T-Mobile’s parent company, in charge. T-Mobile’s vocal CEO John Legere will stay at the helm as the new company looks towards the upcoming adoption of 5G networks.
In the official press release Sprint is listed with an enterprise valuation of $59 billion with the combined company being valued at $146 billion. The terms of the merger however list Sprint’s and T-Mobile’s values at $26.5 and $54.1 billion, respectively. The two companies together have $60 billion in debt and by combining their operations, they are counting on counting on reducing this.
The merger announcement states that the new company „will be named T-Mobile, and it will be a force for positive change in the U. S. wireless, video, and broadband industries.“ Of the 14 seats on the new T-Mobile board, Deutsche Telekom would hold nine and SoftBank, Sprint’s majority owner, would hold four.
If the deal passes antitrust regulators, it would result in a wireless provider with nearly 100 million customers. This would leave the US market dominated by just three providers and give T-Mobile a boost in going after Verizon and AT&T.
Given their reception to the ongoing AT&T and Time Warner merger, the Trump Administration may take a very close look at this deal however. Previous negotiations failed due to regulatory opposition from the Obama administration and internal differences in opinion of how the new company should operate. Citing a more demanding wireless marketplace, Sprint and T-Mobile acknowledged that a merger was the only way for the two to compete.
