T-Mobile will acquire rival Sprint for US$26.5 billion in stock, a transaction both mobile carriers hope will give them a lead in 5G.
The companies announced the agreement on April 29th.
The two companies hope together they can bulk up enough to do battle with Verizon and AT&T in the next generation wireless market.
T-Mobile boss John Legere will be CEO of the combined business, and T-Mobile COO Mike Sievert will be president and COO of the combined company.
Sprint, T-Mobile US reignite mega-merger talks (again)
The companies said that at Friday’s close-of-trade prices the new business will be worth $146 billion.
Legere said the new company will “create robust competition across wireless, video, and broadband”.
Talks between the companies’ owners (T-Mobile is owned by Deutsche Telekom; Sprint by Softbank) had begun and stalled before, with the most recent prior proposal failing five months ago.
Sprint CEO Marcelo Claure, who will sit on the board of the new company said: “5G is coming, and what happens in the first few years of a new technology is crucial.”
Legere highlighted the two companies’ spectrum assets as a key driver of the transaction – Sprint’s 2.5 GHz spectrum and T-Mobile’s 600 MHz holdings will make it easier for them to roll out 5G across America, creating “the highest capacity mobile network in US history”.
The deal almost certainly won’t sail through, given the competitive implications that flow from reducing the number of major mobile carriers in the USA. So brace for regulatory rumblings a-plenty before the deal goes down. ®