Sprint and T-Mobile jointly announce the end of merger discussions
For the second time in four years, Sprint and T-Mobile have failed to reach a merger agreement. The United States’s fourth- and third-largest carriers jointly announced that they have ended discussions today.
T-Mobile CEO John Legere stated that implied that the pair were not able to achieve a result that would “result in superior long-term value for T-Mobile’s shareholders compared to our stand-alone performance and track record.” Sprint CEO Marcelo Claure said that both sides “agreed that it is best to move forward on our own.”
The months-long prospects of a merger have gone through a tumultuous past two weeks in which Masayoshi Son, chairman of Sprint and parent company SoftBank, reportedly stalled on talks with hesitation on losing control of a combined network and the valuation of his carrier — currently around $25 billion while T-Mobile is worth near double. This week, Legere was said to have called Claure to push for more negotiation.
The last merger failure occurred in 2014, when the companies faced heavy regulatory headwinds. It was expected under the Trump administration that it would be easier to pass muster with the FCC and the Department of Justice. In lieu of a merger, Sprint may opt to restart negotiations on a partnership or combination with wireline telco Charter Communications.
The prices of S and TMUS have been riding to recent highs on hopes of a merger. We’ll see how the market reacts on Monday.