Mobile Sprint merger has been called off

Ann Santiago
October 31, 2017

A new report indicates that the long-hyped Sprint T-Mobile merger may be falling apart.

Since T-Mobile has over 10 million more U.S. phone subscribers than Sprint, it had been widely assumed that the combined company would primarily be owned by Deutsche Telekom, T-Mobile's parent company.

Japan's SoftBank Group Corp (TYO:9984) is reportedly planning to break off merger talks between subsidiary Sprint Corp (NYSE:S) and T-Mobile US Inc (NASDAQ:TMUS) due to a failure to agree on ownership of the combined company. The two companies have been in talks for months, and Softbank had hoped to combine the two companies as early as 2013.

According to the Journal, the two were discussing an all-stock deal that would give Deutsche Telekom control, but over the weekend Softbank's board of directors balked.

Sprint's shares were down 9 percent at $6.36 and T-Mobile fell 4.3 pct to $60.35.

The Sprint parent could not settle a dispute with Deutsche Telekom, T-Mobile's European parent, regarding the control, sources said.

Investors have cheered on a combination of T-Mobile, the third-largest US wireless carrier, with No. 4 Sprint as a way to cut costs and forge a bigger competitor to take on AT&T and Verizon Communications.

Masayoshi Son, the founder and CEO of Tokyo-based telecom and Internet company SoftBank had always been looking for a deal to improve Sprint's position.

The two firms had held talks in 2014 on a merger but ended discussions in the face of opposition from U.S. regulators.

Son reportedly also sought a merger of Sprint and Charter Communications, but Charter rebuffed that.

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