T-Mobile US Inc expects its $26 billion (all stock) acquisition of Sprint Corp to be approved by no later than the first half of 2019, despite the merger being rejected by antitrust officials in Washington four years ago.

By Joe McDonough

Posted on April 30, 2018

The third and fourth largest US wireless carriers are looking to unite in a deal that would create the nation’s highest-capacity network.

The combined entity, to be called T-Mobile and worth an estimated $146 billion, would have a customer base of 127 million customers, blowing past market leaders Verizon Communications Inc (116 million) and AT&T Inc (93 million).

The advantages being touted by T-Mobile include the thousands of jobs that will need to be filled, better rural coverage, and most importantly the ability to invest $40 billion in the build of a next-generation wireless network over the next three years.

Specifically, T-Mobile CEO John Legere — who will remain in charge of the new company — boasts it will help America leapfrog China and South Korea in the 5G race.

“Global tech leadership for the next decade is at stake,” announced Legere, alongside Sprint chief Marcelo Claure.

“And only the new T-Mobile will have the network and spectrum capacity to quickly create a broad and deep 5G network in the first few years of the 5G innovation cycle.

“The years that will determine if American firms lead or follow in the 5G digital economy.”

So, it still might not be enough to sway regulators.

As Bloomberg reports, “In 2014, when the department’s antitrust division last looked at the deal, the answer was: Don’t even try.”

And it will be subject to another stringent probe by the Justice Department into how it will affect competition in the industry, and the impact on the consumer.

As recently as five months ago, the deal fell over because Deutsche Telekom AG, the German parent-company of T-Mobile, and SoftBank Group Corp, the Japanese owner of Sprint, couldn’t reach “mutually agreeable terms”.

But that appears to be one less hurdle to negotiate, with the parties having accepted the following proposal.

  • The all-stock deal values Sprint at $26.5 billion or $6.62 a share.
  • Deutsche Telekom gets to appoint nearly two-thirds of the board.
  • Legere will run the combined operation.
  • Masayoshi Son, CEO of Softbank, will be a director and get three other seats for his minority stake.

    Also playing against T-Mobile and Sprint is the fact the Trump administration is currently suing to block AT&T’s $85 billion deal for Time Warner.

    However, Donald Trump, with his catchline ‘Make America Great Again’, is more likely to greenlight a deal that will give Washington any edge over Beijing in the tech sphere.

    Just last month, the US President prevented Singapore-based chipmaker Broadcom from acquiring US-based Qualcomm, so that American progress couldn’t be compromised.