Sprint Proposes Merger with Charter Communications
July 28 2017 - 8:01PM
Dow Jones News
By Ryan Knutson and Dana Cimilluca
Sprint Corp. has proposed a merger with Charter Communications
Inc. that would create a media and communications giant, upending
industries that are already in the throes of dramatic change.
Since the end of May, Charter and Comcast Corp. had been in
exclusive talks with Sprint over possible deals, including one that
would allow the cable companies to resell wireless service under
their own brands. Though the exclusivity window ended this week,
Sprint Chairman Masayoshi Son continues to pursue a much larger
deal with Charter, according to people familiar with the matter: a
full-blown merger of the two companies.
The complex proposal calls for the creation of a new publicly
traded entity that would combine Sprint and Charter and be
controlled by Japan's SoftBank Group Corp., the people said.
SoftBank, whose chairman is also Mr. Son, already controls
Sprint.
It is far from guaranteed that Charter would ultimately agree to
such a deal.
Should Mr. Son manage to succeed, the deal would be big: Sprint
has a market value of $33 billion and about that much in net debt.
Charter has a market value of nearly $100 billion after swallowing
Time Warner Cable Inc. last year and more than $60 billion of net
debt.
The resale deal the cable companies have been discussing, which
could have included an agreement to invest in Sprint's network and
possibly buy a stake in the wireless carrier, appears to have taken
a back seat to the merger talks. It is still possible, however,
that there could be a resale deal with Sprint instead of any
full-blown merger.
Before embarking on the resale talks, Sprint had been discussing
a possible merger with rival T-Mobile US Inc., an effort that could
now be rekindled alongside the Sprint-Charter talks, the people
said. Even if Sprint and Charter did strike a merger or resale
deal, it wouldn't preclude a subsequent tie-up between the new
group and T-Mobile, one person said.
Write to Ryan Knutson at ryan.knutson@wsj.com and Dana Cimilluca
at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
July 28, 2017 19:46 ET (23:46 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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