SoftBank Said to Consider Sprint T Mobile Combination
18 February, 2017, 00:23
Both companies involved are having a good day in the market with Sprint shares up more than 3.5% and T-Mobile shares up over 4%. The merger would bring together America's third-place (T-Mobile) and fourth-place (Sprint) wireless carriers, putting the combined company in a better position to take on Verizon Wireless (first-place) and AT&T (second-place).
"Nobody is talking right now", said T-Mobile CEO John Legere.
Sprint parent company SoftBank is prepared to sell Sprint to T-Mobile parent company Deutsche Telekom, reviving a potential merger between the two companies, reports Reuters.
But Softbank and and Deutsche Telekom haven't had discussions yet because the companies aren't legally allowed to talk to each other during an auction of airwaves going on right now, in which the FCC has set aside a swath of spectrum for bidding specifically for smaller players. Once the auction ends, though, it's expected that SoftBank and Deutsche Telekom will begin negotiations about a possible deal.
The companies are now blocked from talking to each other until April 1 due to the Federal Communications Commissions' wireless spectrum auction, which concludes on March 30.
Two and a half years ago, SoftBank abandoned talks to acquire T-Mobile for Sprint amid opposition from US antitrust regulators.
In 2011, AT&T, like SoftBank, was deterred by Justice Department regulators from pushing through a $39 billion takeover of T-Mobile. "A T-Mobile merger with Sprint could generate significant synergies, though regulatory approval is not a slam dunk. Maybe a simple merger, we may be dealing with T-Mobile, we may be dealing with totally different people, different company", Son said. In a meeting with then President-elect Trump in early December, SoftBank Chief Executive Masayoshi Son pledged to invest $50 billion and create 50,000 jobs in the United States.