Economy

Mobile, Sprint merger watch continues with final details being worked out

Mobile, Sprint merger watch continues with final details being worked out”

Besides some final due diligence items under review, the biggest item to be addressed appears to be the exchange ratio to be used for Sprint's valuation in what is likely going to be an all stock deal.

A merger would bring together the third (T-Mobile) and fourth (Sprint) largest wireless carriers in the nation, creating a stronger competitor to Verizon Wireless and AT&T.

Sprint shares closed at $7.50 Thursday in NY, valuing the company at about $30 billion.

The deal's not expected to have a traditional breakup fee, Bloomberg says, which cuts risk in case the merger is rejected on regulatory grounds (similar to when Comcast walked away from Time Warner Cable after regulator pressures). Some of the current discussion topics include Sprint's valuation (estimated to be around $29 billion), the location of the combined company's headquarters, and appointments to the executive management team.

While no breakup fee provision is planned at the moment, SoftBank may still push for a cash termination payment if it feels it has compromised more than it would like on other issues that haven't yet been finalized, one of the people said.

Besides analysts watching the wireless carrier industry in the US, the deal may draw other attention as people watch to see how the Trump administration handles their anti-trust review of the proposed merger. While a merger/buyout between the two carriers has been rumored for years, CNBC claimed that T-Mobile's parent company Deutsche Telekom would emerge as the majority owner of the new combined carrier. Last year, T-Mobile's was on October 24, and Sprint's was the next day.



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