Sprint/T-Mobile US merger talks on again, says report (Feb 20th)
- Report from Reuters says that SoftBank is prepared to give up its majority stake in Sprint
- Such a deal would create a 3rd giant rival in US mobile market with Verizon 35% market share, AT&T had 32% and Sprint/T-Mobile will have 31% between them
- As of yet SoftBank has not made an approach to Deutsche Telekom (majority owner of T-Mobile) because the FCC is carrying out a spectrum auction and it bans any contact during the process. The auction ends in April and then the “the two parties are expected to begin negotiations” said Reuters
- Since the previous attempt at a merger in 2014 which stopped due opposition from US antitrust regulators, the value of T-Mobile has increased from $30 billion to $50 billion while Sprint has remained at $36 billion, roughly the same as in 2014. T-Mobile surpassed Sprint to be the #3 US carrier
- No one from the any of the rumored parties has commented but Reuters points out that Tim Hottges, CEO of Duetsche Telekom, no longer wants to part with T-Mobile US, of which it owns 65%
- Son said earlier in February about a potential deal: “We may buy, we may sell. Maybe a simple merger, we may be dealing with T-Mobile, we may be dealing with totally different people, different company.”SoftBank Chief Executive Masayoshi Son told analysts on the company’s latest quarterly earnings call earlier this month
- If Son and Hottges do want to do a merger, they have to persuade US regulators to let them reduce the number of carriers from 4 to 3 which was not favorable in 2014 but in 2017, the FCC chairman and a republican administration, is said to be more business friendly
Exclusive: SoftBank willing to cede control of Sprint to entice T-Mobile – sources (Feb 17)
http://www.reuters.com/article/us-sprint-corp-m-a-t-mobile-us-exclusive-idUSKBN15W26E
- SoftBank prepared to give up control of Sprint to Deutsche Telekom to clinch a merger of the two US wireless carriers, according to people familiar with the matter
- SoftBank has not approached Deutsche Telekom yet to discuss deal because of the FCC has imposed strict anti-collusion rules that ban discussion between rivals during ongoing auction of airwaves, which ends in April
- After the auction, the two parties are expected to being negotiations, the sources told Reuters this week (Feb 17)
- Deutsche Telekom CEO Tim Hoettges said that they will no longer willing to part with T-Mobile, prompting SoftBank to explore a new strategy towards a potential combination, the sources said.
- SoftBank owns 83% of Sprint and has begun frustrated with its inabilirt to grow in the US market, which is dominated by AT&T and Verzon
- SoftBank is still discussing options but is now willing to surrender ontrol of Sprint and retain a minority stake in a merger with T-Mobile, the sources said
- Investors say that a merger would still face antitrust challenges but made strategic sense as the industry moves to 5th generation wireless technology. Carries will need to spend billion to upgrade to 5G networks that promise to be 10 – 100 times faster than current speeds
- With the advent of 5G, Deutsche Telekom might receive offers for T-Mobile from other US companies such as DISH network and Comcast Corp.
- Sprint could also be an acquisition target for other companies, the sources said
Latest Sprint & T-Mobile merger rumor cites SoftBank as minority partner
- SoftBank CEO and Sprint Chairman Masayoshi Son willing to sell stake to DT but maintain minority control in emboldened T-Mobile
- SoftBank controls 83% of Sprint, DT owns 65% of T-Mobile US
- No deal on table currently due to anti-collusion rules during FCC spectrum auctions
- Merger talks have been reignited ever since Trump elected president and have been seen to take affect in stock market and Son stating he will invest $50 billion and generate 50,000 jobs in US and the new FCC chairman is considered more business friendly than predessors
- Sprint wants to merger but DT is looking to maintain control of its surging US operations and DT CEO is not in the “mood of selling business” and has no plans to sell TMobile
- “We are now open to how we could create something beyond our execution, which is creating value,We compare a lot of variables. With Trump, the regulatory environment might change. Everybody is expecting this. At least the chance is bigger then it was under the Democrats.” – Hoettges at the Morgan Stanley TMT Conference in Barcelona, Spain, according to Reuters
- Hoettges sang a similar tune during DT’s third-quarter conference call with investors when he stated: “Look, we like the U.S. business. We like our management there. We like our story there and the track record, and we do not see that there is any weakness on the overall story. So is there any plans with regard to the change of our ownership? No, it’s not. But we want to be open-minded to further consolidation steps in that market, what might come up there in the next years and therefore we are not changing our kingmaker strategy there. The U.S. market is quite attractive and the outlook is quite encouraging and the share price is reflecting this. This is the right market to be in.”
Is a T-Mobile Sprint merger about to be revived? (Feb 17)
- In an interview earlier this week, T-Mobile’s chief operating officer Mike Sievert told USA TODAY, “We’re very strong on a standalone basis. And that being said, we’re also opportunistic and our stance on that has been consistent for years. And if the right opportunities came along to turbo-charge our strategy, our brand, our set of assets, we’d be open to it.”
- Back in August 2014, the two rivals called off merger talks, because it was believed that the U.S. regulatory hurdles were too steep. But in December, SoftBank CEO Masayoshi Son met at Trump Tower with then-President-elect Donald Trump, rekindling speculation that a merger could indeed take place.
SoftBank preparing to approach T-Mobile about Sprint Merger; Reuters, citing sources
http://www.cnbc.com/2017/02/17/softbank-eyes-sprint-t-mobile-deals.html
- Two and a half years ago, SoftBank abandoned talks to acquire T-Mobile for Sprint amid opposition from U.S. antitrust regulators. That deal would have seen Deutsche Telekom retain a minority stake in T-Mobile, down from about 65 percent.
- Deutsche Telekom Chief Executive Tim Hoettges has said in recent months that the German company is no longer willing to part with T-Mobile, prompting SoftBank to explore a new strategy to achieve a potential combination, the people said.
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