There have been rumors about a potential T-Mobile and Sprint merger for years now, but each time they didn’t end up being real. However, T-Mobile and Sprint are entering due diligence in a deal that will establish Deutsche Telekom as the owner of the new company.
The stock exchange ratio will be dictated by the market. Also, it seems that the agreement may be signed in the third week of October 2017. While some of the details regarding the deal are still negotiating, it seems that most of the details are figured out. Plus, both companies tend to agree that by opting for a merger, they are eliminating a wide range of extra costs.
T-Mobile and Sprint are the third and fourth largest carriers in the US, so this is a pretty significant thing for the industry. However, this does bring in some questions whether regulators will block it due to antitrust issues or they will let the deal go through.
Share value is dropping for both companies, with the Sprint shares being the most affected ones. T-Mobile has a higher company value as it stands at around $53 billion in revenue, whereas Sprint has a revenue of around $32 billion. Still, these are both gigantic companies when it comes to their revenue margin, and it’s pretty safe to say that their merger will have some ripples in the industry.
T-Mobile is owned by Deutsche Telekom, whereas Sprint is controlled by Softbank. Sprint had the opportunity to merge with Charter Communications, but that deal did not go through in the end. However, it seems that this deal will indeed go through and it will surely end up opening a lot of new grounds for the industry.
Of course, the companies also have some minority owners. A quick study has shown that the minority owners will own around 30% or a bit more from the newly formed company. As we mentioned earlier, this is not the first time when we see talks about a possible merger. These have been around for quite a while, but merging two massive companies like this does take a lot of time and negotiation.
Rumors are stating that the T-Mobile CEO, John Legere will most likely end up getting the reigns of the combined company. But at the end of the day, the leading seat is open for anyone in these two major companies. Still, considering that the merger needs someone with a lot of experience, we will most likely see Legere running the company, at least for a little while.
The potential T-Mobile and Sprint is a big deal for the industry, and it may end up bringing in a very powerful competitor for the leading companies. Whether this will happen or not, this remains to be seen. But what we do know is that the two carriers have advanced talks right now, so if everything works as expected, we should be able to see a deal in no time!
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