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US: Sprint, T-Mobile deal crumbles

 |  August 5, 2014

Sprint and T-Mobile, the nation’s third- and fourth-largest wireless operators, respectively, have reportedly called off their highly publicized plans to merge.

According to reports, Sprint is set to announce Wednesday that it will no longer pursue a takeover of its smaller rival. Experts suspect Sprint, owned by SoftBank, has finally accepted that regulatory hurdles are much too high.

For months news has been circulated about a possible deal valued at about $35 billion and higher, at times. But with several major media mergers in the works – including Comcast’s acquisition of Time Warner Cable – industry experts had doubted a merger of two major wireless competitors would receive antitrust approval.

The takeover would have needed approval from both the US Department of Justice and the Federal Communications Commission.

Still, the companies seemed confident in their plans. SoftBank and T-Mobile parent Deutsche Telekom had reportedly agreed to a $2 billion breakup fee should the deal be thwarted.

Now, however, Sprint seems to have accepted defeat. Late last week French wireless operator Iliad had offered $15 billion to acquire T-Mobile, a bid that may have helped propel the fall of the Sprint/T-Mobile tie-up.

News of the failed merger emerged form unnamed sources late Tuesday. One of those sources also said that Sprint is expected to announce a new CEO to replace current leader Dan Hesse, reports say.

Full content: USA Today

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