For the second time around, it looks like the merger between the number 3 and number 4 carriers in the US will not be pushing through. Sources are saying that Softbank, which owns Sprint, may be pulling out of the merger negotiations with Deutsche Telekom, the owner of T-Mobile. While they were able to strike a “broad agreement” over the merger of the two carriers, they have been unable to make a breakthrough when it comes to favorable ownership terms.
According to the sources, Deutsche Telekom wanted to have the controlling stake in the entity that would be created from the merger. Initially, Softbank was actually okay with this but after a meeting late last week, the board decided they did not want to give up their control in the new company that will be formed. This means that they will not be able to reach a satisfactory agreement for both parties and so Softbank reportedly decided to just end merger talks.
This actually isn’t the first time that a merger between the two carries has failed. They were close to announcing a merger back in 2014 but due to some regulatory concerns, they decided to call it off. This time around, Softbank is supposedly passing off the proposed end-of-talks to Deutsche Telekom, but until either company makes an official announcement, then the merger talks will be hanging in limbo.
T-Mobile is currently 3rd in the US carrier market while Sprint is 4th. A merger between the two would have brought 130 million US subscribers together and challenged the big two, AT&T and Verizon. But now that seems highly unlikely, unless we get another round of talks somewhere down the road.
SOURCE: Wall Street Journal
