Report: Sprint in Negotiations for T-Mobile Acquisition - Update

Report: Sprint in Negotiations for T-Mobile Acquisition - Update

Sprint T-Mobile Logos 310x

Sprint is close to buying T-Mobile for $40 a share

Update: In a surprise move last night, Sprint abandoned its plans to acquire T-Mobile, citing regulatory pressure about consolidating America's four big wireless carriers into only three.

Along with cancelling the bid, Sprint has shown CEO Dan Hesse the door. After being named CEO in 2007, Hesse oversaw a substantial upgrade of Sprint's network, but failed to maintain a subscriber base that seemingly switched to larger rivals Verizon and AT&T.

Sprint board member Marcelo Claure, who also serves as CEO of Brightstar, has been named the new CEO. Sprint's parent company Softbank announced it would buy Claure's ownership in Brightstar as part of his transition to be Sprint's chief executive.

T-Mobile is still being targeted for acquisitions by others, including French telecom giant Iliad.

Original Story: Bloomberg is reporting that Sprint is in final acquisition talks with T-Mobile.

The deal is said to value T-Mobile at just under $40 a share, and the purchase funds would be 50 percent cash, and 50 percent Sprint stock. Once the deal is complete, Softbank (Sprint's parent company) would be in control of T-Mobile, while the latter's current owner, Deutsche Telekom, would retain a 15 percent stake in the combined venture.

If the deal goes through at $39 per share, which seems to be the popular number, T-Mobile would have "a theoretical enterprise value of $40.8 billion," when stock, debt, and cash-on-hand are all considered.

If the deal falls through, or is shot down by the U.S. government, the breakup fee is expected to be north of $1 billion.

Such a breakup fee being used would not be out of the ordinary. AT&T tried -- and failed -- to buy T-Mobile in March 2011. The deal was later abandoned after the U.S. Department of Justice filed a lawsuit to block the sale.

Source: Bloomberg

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Population of the USA "There's not enough competition in the mobile/cable/internet industry's!"

Result Sprint buys T-Mobile, Comcast buys TWC and AT&T buys DirecTV yay for more competition.

If this makes my service much better, while still allowing me to have unlimited everything for 60 bucks a month with no contract, I'll be OK. I like T-Mobiles plans compared to a lot of others, but when I go back to my parents, my phone basically becomes a paperweight.

One mediocre company and another mediocre company. With their powers combined, they're super mediocre!

I used to work for Nextel, and to all you T-Mobile users out there you should run screaming from any company that is absorbed and assimilated by Sprint.

I guess that leaves you with fewer and fewer options, but Verizon seems to work for literally everyone I know so there is always that.

I have a free phone from Assurance because I'm hella poor and barely use a phone, but I used to have Verizon.

I'm so glad now I didn't get that job with T-Mobile. When AT&T tried to acquire T-Mobile, a lot of people lost their jobs.

Also, I feel sorry for the T-Mobile customer base. When Sprint bought Nextel, it was pure hell with the switch over between the phones and towers and GSM vs CDMA crap. If AT&T bought T-mobile, it would have been a smooth transition because they both use GSM. Sprint still uses CDMA.

It's just too bad AT&T & Verizon still have really expensive plans. They would probably gain a bunch of customers because of the shit storm that's about to happen. Unless of course, Sprint has a careful plan for the switch this time.

PirateRose:

Also, I feel sorry for the T-Mobile customer base. When Sprint bought Nextel, it was pure hell with the switch over between the phones and towers and GSM vs CDMA crap. If AT&T bought T-mobile, it would have been a smooth transition because they both use GSM. Sprint still uses CDMA.

Except nextel wasn't using CDMA or GSM protocols but an different tech called IDEN. Which sprint only just decommissioned 11 months ago. 6 years after they bought nextel. To say nothign of the fact that anyone who still had a nextel phone was offered their pick of smartphones for $1 a solid year and a half before that.

There are many legit reasons to rag on sprint (cough 4g cough), their treatment of nextel subscribers is not one of them.

Devin Connors:
Such a breakup fee being used would not be out of the ordinary. AT&T tried -- and failed -- to buy T-Mobile in March 2011. The deal was later abandoned after the U.S. Department of Justice filed a lawsuit to block the sale.

You know, I feel like T-Mobile missed the point of that injunction. It wasn't just that the government had a problem with them selling to AT&T, it's that they had a problem with T-Mobile selling at all. I know they want to sell, I know they're not doing very well right now, but they're just too big to sell without setting off a lot of alarm bells, unless the want to sell to one of the small, semi-regional carriers.

Devin Connors:

Sprint is close to buying T-Mobile for $40 a share

I think its necessary to point out that its only T-mobile US that is being bought. T-mobile's 50 million european subscribers are not in anyway affected by this deal.

I do hope that this gets blocked. The US really doesn't need any fewer telecoms providers at the moment.

RatherDull:
One mediocre company and another mediocre company. With their powers combined, they're super mediocre!

Indeed. I've known a lot of people here that use Sprint and they are just that: mediocre.

I've had a T-Mobile pre-paid phone for 12 years now. It works well enough, I suppose.

If AT&T had bought T-Mobile, I was going to dump the service. I'll never deal with AT&T (or Southwestern Bell) ever again.

If this deal goes through, I'll probably just deal with the uber-mediocrity until my current minutes run out and then switch to Virgin Mobile.

At least that way I'll be helping support a sub-orbital space plane. ;)

Bummer. A combined Sprint/Tmobile might be good enough to get me to drop Verizon. The service is great but the price is killing me.

Good. Sprint is shit. I live in a MAJOR metropolitan area in California. I can't get a GPS signal about 30% of the time I need one. I can't get data about 40% of the time I need it. I fall into roaming zones constantly, but the signal is otherwise OK. The audio is compressed all to hell though. The last thing I want to see is Sprint buy better businesses.

The local Bell carrier my family was using got sold to Verizon several months ago and there was no reason for us to pay out the ass for Verizon when we only use our phones in town. I went out and talked to a few stores (before settling on AT&T) and no one thought that deal stood a chance in hell. Specifically, the FCC made a law so that the carriers could only buy a percentage of spectrum every year. Otherwise all the rich companies (Verizon) would just buy most of it. Because they want more carriers and specifically made that law to help companies like T-Mobile compete, there's no way they would have let Sprint buy them

shirkbot:

Devin Connors:
Such a breakup fee being used would not be out of the ordinary. AT&T tried -- and failed -- to buy T-Mobile in March 2011. The deal was later abandoned after the U.S. Department of Justice filed a lawsuit to block the sale.

You know, I feel like T-Mobile missed the point of that injunction. It wasn't just that the government had a problem with them selling to AT&T, it's that they had a problem with T-Mobile selling at all. I know they want to sell, I know they're not doing very well right now, but they're just too big to sell without setting off a lot of alarm bells, unless the want to sell to one of the small, semi-regional carriers.

They could sell to an overseas company (like the French one mentioned in the news article), but yes I agree that selling to another major US telecoms company is unlikely to end well for them with the need to keep competition up in the US. Glad the deal was abandoned.

 

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