Mubasher: T-Mobile, a subsidiary of Deutsche Telekom AG, and Sprint Corporation have officially called off merger talks to establish a US wireless company to link the US’ third- and fourth- largest wireless carriers.
SoftBank Group Corp, which acquires more than 80% of Sprint, has been in negotiations for months with Deutsche Telecom about a tie-up of the two cellular providers.
The prospect of the two companies coming together has been “compelling” for many reasons, including the value it would create for shareholders and the benefits it would bring consumers, said John Legere, president and chief executive officer of T-Mobile US Inc., in the statement.
The failed merger may help maintaining wireless prices low as the four carriers have been heavily discounting their cellphone plans in a battle for consumers.
The prospect of combining T-Mobile with Sprint was compelling, CEO of T-Mobile John Legere said in the statement.
“We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding standalone performance and track record,” Lergere added.
“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination,” Sprint president and CEO and SoftBank board member Marcelo Claure said in the statement.
“However, we have agreed that it is best to move forward on our own,” Claure noted.
SoftBank CEO Masayoshi Son, who raised up to $100 billion for the bank’s VisionFund, will need to find another option for Sprint after the agreement with T-mobile has failed.
Earlier this year both firms showed interest in a tie-up, upon which SoftBank was ready to give up control to do a deal with T-Mobile, sources told Reuters in February.
