Sprint, T-Mobile merger called off as SoftBank withdraws: Report
FBN’s Charlie Gasparino on a report that Softbank is calling off talks to merge Sprint and T-Mobile.
Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) shares are plunging Monday amid a report that SoftBank Group, Sprint’s parent company, is nixing a proposed merger between the two telecommunications giants.
The deal purportedly fell apart after SoftBank and Deutsche Telekom, T-Mobile’s owner, failed to agree on terms of ownership for the company post-merger. Deutsche Telekom had pushed for a controlling stake, Nikkei news service reported, citing a source familiar with the situation.
T-Mobile’s stock fell more than 5% in trading on Monday. Sprint shares plunged more than 7%. SoftBank officials could approach Deutsche Telekom to formally end negotiations as early as Tuesday, according to Nikkei’s report.
Reports of a potential merger between the two companies first emerged in September. Under initially-discussed terms, Deutsche Telekom was set to be the majority owner in a stock-for-stock deal. At the time, SoftBank CEO Masayoshi Son had reportedly mandated that he have a say in how the company proceeded if the merger succeeded, though T-Mobile CEO John Legere was projected to lead the combined companies.
Had it succeeded, the merger would have positioned the two companies to better challenge telecom leaders Verizon (NYSE:VZ) and AT&T (NYSE:T) in the competitive industry.