Reports suggest Sprint would pay $32 billion for T-Mobile


Sprint Corp. reportedly has worked out many of the terms for a $32 billion deal to acquire T-Mobile US Inc., conflicting and unconfirmed accounts said Wednesday.

Reports by Bloomberg News, The New York Times and The Wall Street Journal agreed that the deal would have Overland Park, Kan.-based Sprint acquire controlling interest in the smaller T-Mobile. They disagreed about some of the details, including the degree to which T-Mobile’s parent company, Germany-based Deutsche Telekom, would remain a stockholder after a merger.

None of the reports identified its sources, citing only individuals with knowledge of the supposed deal.

The companies did not report any news of a deal, and a Sprint spokesman declined to comment.

A Sprint/T-Mobile announcement likely won’t come until next month. Each company must perform detailed study of each other’s confidential financial and other information, work out a definitive agreement and arrange financing, The New York Times report said.

Sprint has been pushing for a deal that would add to its 54 million subscribers and allow it to more successfully challenge the much larger No. 1 Verizon and No. 2 AT&T. Buying T-Mobile would give Sprint about 92 million subscribers, or nearly as many as AT&T’s 94 million and Verizon’s 115 million, according to totals provided by Macquarie Equities Research.

A combination of the No. 3 and No. 4 U.S. carriers also would allow the companies to cut costs where they would have duplication, such as in retail stores, customer call centers or other areas.

According to all three accounts, Sprint would pay about $40 a share for T-Mobile stock. The value would involve a combination of cash and shares of Sprint, which Bloomberg said would be split evenly.

Shares of T-Mobile rose 8 cents Wednesday to close at $34.28. Sprint shares lost 10 cents and closed at $9.40. The reports of a deal came after the stock market had closed.

Deutsche Telekom would end up owning about 15 percent of the combined Sprint/T-Mobile company, according to Bloomberg, but 20 percent according to The New York Times. The Journal said the share is unsettled but between 15 percent and 20 percent.
Deutsche Telekom currently owns 67 percent of T-Mobile.

Sprint is 80 percent owned by Tokyo-based SoftBank Corp., which is the third-largest wireless company in Japan. Its chief executive, Masayoshi Son, who also is Sprint’s chairman, has pushed publicly for a deal to make Sprint a larger rival.

Any proposed deal would face intense review by the Federal Communications Commission and the US Department of Justice. Washington regulators have been open about their preference for keeping the four national carriers in place.

The FCC already has two other large proposals under review. Comcast Corp. and Time Warner Cable Inc. seek a merger, and AT&T Inc. wants approval to buy satellite television company DirecTV.



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