Sprint, T-Mobile Restart Deal Talks, Once Again -Update
April 10 2018 - 1:27PM
Dow Jones News
By Drew FitzGerald and Dana Mattioli
Sprint Corp. and T-Mobile US Inc. have rekindled merger talks,
people familiar with the matter said, as the wireless rivals
explore a combination for the third time in four years.
The latest discussions come just five months after a previous
courtship collapsed largely over who would control the combined
firm. The talks also come in the midst of an antitrust fight
between the U.S. government and AT&T Inc.
It is unclear what terms the two sides are considering, and it
is possible, as before, that they could fail to reach an agreement.
The latest discussions are at a preliminary stage, the people
said.
The talks are complicated by the ownership of the two firms.
Japanese telecom giant SoftBank Group Corp. owns nearly 85% of
Sprint. Germany's Deutsche Telekom AG controls T-Mobile, which is
the larger company both in terms of subscribers and market
value.
The combined company would have nearly 100 million customers,
putting it just ahead of AT&T, which had 93 million U.S.
subscribers at the end of 2017, and behind Verizon Communications
Inc., which ended the year with 116 million. The figures include
both prepaid services as well as monthly subscribers.
Wall Street has long anticipated the marriage and financial
analysts estimate the companies could save billions of dollars each
year by sharing network infrastructure, storefronts and
headquarters.
But the marriage of the No. 3 and No. 4 carriers has run into
hurdles. In 2014 regulators under the Obama administration objected
to the combination, saying four national providers ensure more
choices and lower prices for consumers.
It is unclear what kind of reception the deal would get in the
Trump administration, which has loosened regulations under the
Federal Communications Commission but also sued to block AT&T's
proposed $85 billion takeover of media company Time Warner Inc.
Little has changed in the wireless industry since both parties
last abandoned their talks in early November, though Sprint's share
price has tumbled roughly 20% while T-Mobile has held steady.
Sprint's stock decline has pushed it market capitalization down
to around $21 billion, from about $27 billion five months ago.
Sprint also had more than $32 billion in net debt as of Dec. 31.
T-Mobile has a market value of roughly $50 billion and about $30
billion in net debt.
Joe Flint contributed to this article
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Dana
Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
April 10, 2018 13:12 ET (17:12 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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