The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Sprint Corp. has started preliminary conversations to merge with T-Mobile US Inc., the latest attempt to consolidate in a market watched closely by US regulators, according to people familiar with the matter.
Executives of both SoftBank Group Corp., Sprint’s largest shareholder, and Sprint itself have had informal contact with T-Mobile owner Deutsche Telekom AG about a transaction, said the people, who asked not to be identified because the discussions are private. Merger talks in the wireless industry had been on hold for almost a year because of a government spectrum auction that required participants to avoid negotiating deals with each other until April 27.
SoftBank Chairman Masayoshi Son and Deutsche Telekom Chief Executive Officer Tim Hoettges separately told investors this week they’d be open to discussions about consolidation. Banks haven’t been formally hired, although financial firms are jockeying for roles if a deal comes together, the people familiar with the matter said. Representatives for Sprint, SoftBank, T-Mobile and Deutsche Telekom, which owns about 65 percent of T-Mobile, declined to comment.
Deutsche Telekom rose 4.9 percent to 17.53 euros in Frankfurt, the biggest gain since December 2015. Sprint rose 1.5 percent to $7.99 at 11:46 a.m. in New York, while T-Mobile dropped 0.4 percent to $65.52.
A Sprint merger with T-Mobile comes fraught with regulatory risk and won’t be easy to structure. Sprint had been interested in acquiring T-Mobile in 2014, though the deal fell apart on regulatory concerns. Since then, T-Mobile’s market valuation has soared to $55 billion — about $23 billion more than Sprint’s. A merger proposal would be a major test of the Trump administration’s attitudes to telecommunications mergers at a time when it’s already weighing AT&T Inc.’s $85.4 billion purchase of Time Warner Inc. Although it’s now larger, it’s unclear if T-Mobile has the desire to be the acquirer in any deal since Sprint has struggled to retain customers even after offering the industry’s cheapest unlimited data plans. Sprint is languishing in fourth place in the US wireless market.
In addition to T-Mobile, Sprint also believes it could receive overtures from cable companies, such as Comcast Corp., Charter Communications Inc. and Altice NV, which have expressed an interest in the US wireless market, people with knowledge of matter said.