Date
17 October 2017
Investors have long expected a deal between T-Mobile and Sprint despite potential antitrust risks. Photo: Reuters
Investors have long expected a deal between T-Mobile and Sprint despite potential antitrust risks. Photo: Reuters

T-Mobile US explores takeover of Sprint: source

US wireless carrier T-Mobile US Inc. is exploring taking over rival Sprint Corp in an all-stock deal, after SoftBank Group Corp. offered to give up its majority ownership of Sprint, Reuters reports, citing a person familiar with the matter said.

The latest negotiations come after Reuters reported earlier this year that Japan’s SoftBank was prepared to give up control of Sprint to clinch a merger with T-Mobile, and only retain a minority stake in the combined company.

Sprint and T-Mobile, which is controlled by Germany’s Deutsche Telekom AG, are still weeks away from an agreement, and have not settled on a share exchange ratio or even started performing due diligence on each other, the source added.

The companies have agreed, however, that John Legere, T-Mobile’s outspoken chief executive, would run the combined company should there be a deal, according to the source, who asked not to be identified discussing confidential negotiations.

Both Sprint and T-Mobile did not immediately respond to requests for comment.

Sprint’s shares rose 8.2 percent, while T-Mobile’s shares were up nearly 5.3 percent after CNBC first reported on the progress of the talks.

Despite potential antitrust risks, investors have long expected a deal between T-Mobile and Sprint, the third and fourth-largest US wireless service providers, hoping for cost cuts and other synergies.

T-Mobile has been gaining share from larger U.S. competitors AT&T Inc and Verizon Communications Inc. in a saturated U.S. wireless market, through network improvements and lower prices.

Sprint, which had earlier approached cable company Charter Communications Inc. about a potential merger, has now put plans for a bid for Charter on the back burner as it focuses on negotiations with T-Mobile, the source said.

French cable mogul Patrick Drahi’s Altice USA Inc., however, is continuing to work on a potential bid for Charter, another source said. Altice declined to comment while Charter did not respond to a request for comment.

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