T-Mobile to acquire Sprint Corp in $26 billion deal | News | DW | 29.04.2018
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T-Mobile to acquire Sprint Corp in $26 billion deal

The tie-up between the two telecommunications giants will create a formidable competitor to US mobile operators Verizon and AT&T. The all-stock deal will hand control of the business to Germany's Deutsche Telekom.

Deutsche Telekom subsidiary T-Mobile US agreed on Sunday to buy out Sprint Corp for $26 billion (€21.4 billion).

If approved, the deal will combine the third- and fourth-largest US wireless carriers, bringing competition down to three major cellphone companies.

Read more: Deutsche Telekom profit surges on booming home and US markets

Details of the deal

  • The two companies expect to complete their deal by the first half of 2019.
  • Deutsche Telekom, which controls T-Mobile, will own 42 percent of the combined company and control the board, nominating nine of the 14 directors.
  • The proposed all-stock deal values Sprint, owned by Japan's SoftBank Group Corp, at about $59 billion and the combined company at $146 billion, including debt.
  • The transaction is at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of 9.75 Sprint shares for each T-Mobile US share.

Less competition: The two companies have been in on-and-off negotiations for the past four years. The new deal would reduce incentives to keep prices low. T-Mobile has introduced many consumer-friendly initiatives, such as ditching two-year contracts and bringing back unlimited data plans.

Read more: FCC repeals US net neutrality in major blow to internet ecosystem 

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It could cost jobs

The Communications Workers of America union said the merger will cost at least 20,000 US jobs and reduce competition in the wireless market, bringing higher prices.

T-Mobile Chief Executive John Legere said the new business would "be a force for positive change for all US consumers and businesses" and would be able to "bring a broad and deep nationwide 5G network."

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Winning streak: T-Mobile has been on a yearslong streak of adding customers, while Sprint has struggled with debt and a string of annual losses. The new business will have about 131 million subscribers, about equal with second-ranked AT&T and close to market leader Verizon Communications.

Rejected deals: Telecommunications firms were unable to have mergers approved under Barack Obama's administration due to concerns about competition, but for the first time since 2009, the Federal Communications Commission ruled in September the wireless market had become competitive. Donald Trump's FCC Chairman Ajit Pai has not criticized the idea of three national carriers rather than four, as his Democratic predecessor had.

Awaiting approval: The deal still needs to be reviewed by the Justice Department and the FCC.

Read more: Deutsche Telekom hacker very sorry for botnet attack on a million internet users

aw/rc (AP, Reuters, AFP, dpa)

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