Sprint abandons its planned takeover of T-Mobile

There's been plenty of talk in recent months about Sprint and T-Mobile - the third- and fourth-largest carriers in the United States, respectively - merging to create a 'mega-carrier' to take on the might of AT&T and Verizon. Posited as a merger, the move was in reality a takeover bid by Sprint's owners, Japanese communications giant Softbank, for T-Mobile US, which is owned by Germany's Deutsche Telekom. 

But whatever you call it, the deal is now dead in the water. The Wall Street Journal reports that Sprint has withdrawn its offer to purchase T-Mobile, and will continue to go it alone instead. 

The news comes as a bit of a surprise given that as recently as June, Reuters was reporting that the two companies had agreed the broad terms of the deal, with other sources claiming that the merged company would be known as 'Softbank USA'

Ultimately, it seems, the deal fell apart due to regulatory concerns. Even if it had been approved by the two companies' boards, it would still have needed approval by industry regulators - a long and costly process with no guarantee of success. Government officials, including the chairman of the FCC, had already expressed concerns about the potential acquisition, and it seems likely that Softbank lost its appetite for that fight, opting instead to spend its money on strengthening its existing position in the US market. 

T-Mobile has also received an alternative bid, from French company Iliad - although the $15bn on the table is less than half of the $32bn that Sprint was reportedly offering. According to the WSJ, T-Mobile has already rejected that offer. 

Sprint announced today that Marcelo Claure - founder of handset distribution giant Brightstar, which was acquired by Softbank last year - will replace Dan Hesse as its CEO from August 11. Hesse was expected to be replaced by T-Mobile CEO John Legere if the acquisition had been successful. 

Source: The Wall Street Journal via Engadget

Report a problem with article
Previous Story

China bans Apple devices from government over 'security concerns'

Next Story

Windows Threshold: Charms bar is being overhauled

18 Comments - Add comment