Sprint and T-Mobile Call Off Merger, Sending Stocks Tumbling

31 October, 2017, 00:35 | Author: Regina Lloyd
  • SoftBank calling off talks to merge Sprint, T-Mobile

Sprint and T-Mobile may not end up together after all - at least not in the immediate future.

Japan's SoftBank Group Corp (TYO:9984) is reportedly planning to break off merger talks between subsidiary Sprint Corp (NYSE:S) and T-Mobile US Inc (NASDAQ:TMUS) due to a failure to agree on ownership of the combined company.

According to the report, "the German parent had insisted on a controlling stake, according to a source familiar with the situation". Softbank's board reportedly voted on Friday not to give up control of the combined company and therefore to call off merger negotiations.

Japanese financial newspaper Nikkei reported that the two carriers had called off talks aimed at creating a stronger competitor to top USA carriers Verizon and AT&T.

Earlier on Monday, Nikkei reported that SoftBank was expected to approach Deutsche Telekom as early as Tuesday to propose ending the merger negotiations.

It's entirely possible this won't be the absolute end of the Sprint-T-Mobile talks.

Sprint's stock fell as much as 11% in trading after the report. Still, in August, Sprint CEO and President Marcelo Claure said the company would have an announcement "in the near future" addressing merger discussions.

T-Mobile has done well as an independent the past few years, and consumers have benefited.

Investors have cheered on a combination of T-Mobile, the third-largest USA wireless carrier, with No. 4 Sprint as a way to cut costs and forge a bigger competitor to take on AT&T and Verizon Communications.



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