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Sprint, T-Mobile Formally Kill Merger Plans

After rampant speculation and on again, off again negotiations throughout much of the year, Sprint and T-Mobile have formally killed their plans to merge. Reports last week had already indicated that the two sides had been struggling to agree on what a merged company might look like, specifically whether T-Mobile owner Deustche Telekom or Sprint owner Softbank would have greater control. Given T-Mobile's success in the market, it's likely the company wanted control to guarantee that momentum.

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A joint press release by the companies only indicates they were "unable to find mutually agreeable terms."

"The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders," said T-Mobile CEO John Legere in a statement. "However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” Legere added.

It's an amusing end to a long-standing saga, in large part because the Trump administration's likely rubber stamping of the deal may have been these companies only chance to push the merger past regulators. Wall Street had estimated that the deal might have killed anywhere between 10,000 and 30,000 jobs, potentially more employees than Sprint currently even has. History also suggests the reduction in major competitors from four to three would have reduced overall competition and likely raised rates for consumers.

Legere insisted that T-Mobile will now get back to work trying to disrupt the sector.

“Going forward, T-Mobile will continue disrupting this industry and bringing our proven Un-carrier strategy to more customers and new categories -- ultimately redefining the mobile Internet as we know it." insists the CEO. "We’ve been out-growing this industry for the last 15 quarters, delivering outstanding value for shareholders, and driving significant change across wireless. We won’t stop now.”

Sprint meanwhile will turn its attention toward plan B, which potentially could involve an acquisition by Charter Communications.

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Most recommended from 29 comments


Corporate
join:2014-10-04

Corporate

Member

The right choice

Legere needed to lead the combined company in order for it to succeed. Without Legere, the company would have been Nextel all over again.

Sprint is toxic. Anything they have control over ultimately fails, something that three executive leadership teams have failed to fix.

ctaranto
join:2011-12-14
MA

ctaranto

Member

The wicked witch...

..is dead!

telcodad
MVM
join:2011-09-16
Lincroft, NJ

1 edit

telcodad

MVM

SoftBank will now Increase its stake in Sprint

Is this just throwing more money "down the drain?"

SoftBank to Increase Sprint Stake as Vision Fund Boosts Earnings
By Iain Morris, Light Reading - November 6, 2017
»lightreading.com/ser ··· d/737940
quote:
SoftBank has revealed plans to increase its stake in Sprint shortly after abandoning efforts to merge the US telco with local rival T-Mobile US.

The announcement came as the Japanese company reported a sharp increase in operating profits for the April-to-September period thanks to investment activities by its $98 billion Vision Fund, which launched in November last year.
:
SoftBank Corp. said it would increase its stake in Sprint to an upper limit of 85%. Crossing that threshold could trigger a possible delisting of Sprint.

SoftBank was at the end of March this year reported to control about 83% of shares in Sprint, which operates the fourth-biggest mobile network in the US.

In a short statement on SoftBank's website, CEO Masayoshi Son said: "We are entering an era where billions of connected devices and sensors will come online throughout the United States. Continuing to own a world-class mobile network is central to our vision of ubiquitous connectivity. Sprint is a critical part of our plan to ensure that we can deliver our vision to American consumers and we are very confident in its future."

Those remarks follow criticism that a merger with T-Mobile US Inc. ultimately fell apart because Son was unwilling to accept a minority stake in the business, ceding control of the new-look entity to Deutsche Telekom, T-Mobile's German parent.
:
Despite SoftBank's efforts to reinvigorate Sprint, the mobile operator has struggled against its three big rivals -- AT&T, Verizon and T-Mobile -- and had seen a tie-up with the Deutsche Telekom subsidiary as a means of challenging the market leaders.

The deal would have created an operator serving about 130 million customers and with more spectrum than any other US operator.

Following the collapse of talks with Deutsche Telekom, SoftBank is now reported to be in merger discussions with US cable giant Charter, which has long been seen as a rival suitor to T-Mobile. Charter is thought to be keen on playing a bigger role in the US mobile market and -- like Deutsche Telekom -- may have its eye on Sprint's vast spectrum holdings, which could prove valuable as operators launch next-generation 5G services in the next couple of years. ...
EDIT: Karl has a separate news item up about this now: »Softbank Boosts Sprint Stake in Wake of Failed Merger [33] comments

How about ..