T-Mobile, Sprint make progress in merger talks, aim for deal

NEW YORK: US wireless carriers T-Mobile US Inc and Sprint Corp have made progress in negotiating merger terms and are aiming to successfully complete deal talks as early as next week, people familiar with the matter said. The combined company would have more than 127 million customers and could create more formidable competition for the No1 and No2 wireless players, Verizon Communications Inc and AT&T Inc, amid a race to expand offerings in 5G, the next generation of wireless technology.
T-Mobile majority-owner Deutsche Telekom and Japan’s SoftBank Group Corp, which controls Sprint, are considering an agreement that would dictate how they exercise voting control over the combined company, two of the sources said.
This could allow Deutsche Telekom to consolidate the combined company on its books, even without owning a majority stake, the sources added. Deutsche Telekom owns more than 63 per cent of T-Mobile, while SoftBank owns 84.7 per cent of Sprint.
Deutsche Telekom and T-Mobile are also in the process of finalising the debt financing package they will use to fund the deal, the sources said.
There is no certainty that a deal will be reached, the sources cautioned. The companies came close to a merger agreement in November before SoftBank’s chief executive officer, Masayoshi Son, pulled out of the talks at the last minute.
The sources asked not to be identified because the negotiations are confidential. Sprint, T-Mobile, Deutsche Telekom and SoftBank did not immediately respond to requests for comment.
Sprint and T-Mobile have market capitalisations of $24 billion and $55 billion, respectively. Sprint shares rose 9 per cent in afterhours trading in New York, while T-Mobile shares were up 4 per cent.
When the previous round of talks between the companies ended in November over valuation disagreements, Deutsche Telekom Chief Executive Officer Tim Hoettges left the door open by saying: “You always meet twice in life.”
Failure to clinch a deal had left SoftBank’s Son, a dealmaker who raised close to $100 billion for his Vision Fund to invest in technology companies, in search of other options for Sprint. — Reuters