They’re the Ross and Rachel of wireless carriers. On Sunday, Sprint and T-Mobile announced plans to merge, this time in a $26 billion all-stock deal that, if it goes through, creates a worthy competitor for Verizon and AT&T. This is the third time the US’ third- and fourth-largest wireless carriers have talked about getting together.
The deal, which values Sprint near its current share price of $6.50, would create a carrier with nearly 100 million US pre- and postpaid cellphone customers, second only to Verizon. That carrier would be run by Deutsche Telekom, which owns about two-thirds of T-Mobile, and would be run by T-Mobile’s eccentric CEO, John Legere (paywall).
Japan’s SoftBank Group owns nearly 85% of Sprint, and founder Masayoshi Son’s reluctance to cede control has reportedly scuttled past attempts at courtship. The two companies first discussed a merger in 2014, later nixing it over regulatory concerns. They entertained the idea agin last year, but ceased talks in November.
“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination,” Sprint CEO Marcelo Claure said at the time (paywall). In other words: We would have made a great couple.
On April, 10, the Wall Street Journal reported (paywall) that the companies had rekindled talks.
Executives at Sprint and T-Mobile may be anticipating a looser regulatory environment in the Trump administration, but were widely expected to wait for their next rendezvous until after the outcome of court case between the Justice Department and AT&T over the latter’s $85 billion acquisition of Time Warner. Closing arguments in that case take place on Monday. In a nod to that risk, WSJ reports that the Sprint/T-Mobile deal won’t include a breakup fee should regulators block the deal.