Trending

Sprint, T-Mobile in $26.5 Billion Deal to merge in order to take on At&T

T-Mobile US Inc. and Sprint Corp. agreed in a $26.5-billion merger, creating a wireless giant to compete against AT&T Inc. and Verizon Communications Inc.

The deal would help the companies slash costs and could make them a stronger competitor to larger AT&T and Verizon. But consumers might see higher prices because the combined company would not have to offer as many promotions to lure customers.

The proposed all-stock deal values Sprint at about $59 billion and the combined company at $146 billion, including debt. Without debt, the combined company is valued at $26.5 billion.

Deutsche Telekom AG, the Bonn, Germany, company that controls T-Mobile, and SoftBank Group Corp., the Tokyo owner of Sprint, agreed to a combination that values each Sprint share at 0.10256 of a T-Mobile share, the companies said in a statement. That ratio values Sprint at $6.62 a share based on T-Mobile’s Friday closing price of $64.52.Deutsche Telekom will end up with a 42% ownership stake while SoftBank will have 27%. Sprint closed Friday at $6.50 a share.

T-Mobile’s Mike Sievert will be president and chief operating officer. The German company’s chairman, Tim Hoettges, will serve in that role at the combined company, and the board will include SoftBank Chief Executive Officer Masayoshi Son. The companies said they expect synergies of about $43 billion based on net present value, with more than $6.5 billion on a run-rate basis.

The latest negotiations, coming about five months after an earlier merger attempt collapsed, follow years of will-they-won’t-they deliberations. Previous negotiations broke down after the two sides couldn’t agree on how to structure control of the combined entity, people familiar with the matter said at the time. The deal marks the third time Son has acted on his long-held plan to combine Sprint and T-Mobile.

Reference:Bloomberg.com

 

To hear more from us , do follow and like :
kiara
kiara
Engineer by mind, writer out of passion. An avid reader, keen observer and extremely enthusiastic in exploring new things. In a long term relationship with love and enjoyment.I write to help people overcome their weaknesses by helping people with self-improvement and self-growth.

Leave a Reply

Your email address will not be published. Required fields are marked *