The third and fourth largest mobile networks are reportedly nearing a merger that would help them stay competitive against industry leaders Verizon Wireless and AT&T
In a deal that would combine the third and fourth largest wireless telephone companies respectively, Sprint is reportedly close to acquiring T-Mobile in a deal that values T-Mobile at around $32 billion.
The acquisition, which would need federal approval, may happen early this summer, according to the Wall Street Journal, which reported on the deal Wednesday night, citing people familiar with the matter. The New York Times and Bloomberg also reported the story Wednesday.
According to those reports, Sprint would pay around $40 a share for T-Mobile, a premium of 17 percent on Wednesday’s closing price. It would also owe T-Mobile about $1 billion if the deal falls through, meaning Sprint’s making a big bet that regulators will allow the merger to pass unimpeded.
The Sprint/T-Mobile deal follows AT&T’s recent move to acquire DirecTV, which would reinforce AT&T’s position as the company’s second biggest wireless provider, following Verizon Wireless. Sprint and T-Mobile may in fact argue to regulators that joining forces is the only way to stay competitive with Verizon Wireless and AT&T in the long-term.
[WSJ]