June 5, 2014
Sprint has agreed to purchase T-Mobile USA for $32 billion. This marks “further progress in the attempt to merge the third and fourth-biggest U.S. mobile network operators,” according to Reuters. If approved, the purchase calls for Sprint to pay a 17 percent premium to T-Mobile USA’s closing share price on Wednesday. Earlier today, Bloomberg said that an agreement between Sprint and Deusche Telekom’s T-Mobile USA was very close. SoftBank Corp. CEO Masayoshi Son has a 80 percent take in Sprint. According to Hannes Wittig, an analyst at JP Morgan, the $40 price is too low "T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control ... Somewhere in the high 40s would be more appropriate," he said. Reuters continues:
Analysts see the regulatory challenge as the biggest hurdle facing the companies since both the U.S. Federal Communications Commission (FCC) and Department of Justice (DOJ) have expressed a desire to have at least two more network operators competing against the market leaders AT&T and Verizon.In May, Bloomberg reported that T-Mobile USA CEO John Legere is the leading candidate to run the combined company. See also: You Probably Shouldn't Text 911 Just Yet In The US, Sprint Customers Will Receive Up To Six Months Of Spotify Premium For Free, and T-Mobile Confirms Support For iOS 8's Wi-Fi Calling Feature On iPhone.