T-Mobile Is Said to Move Toward Sprint Merger at $24 Billion

T-Mobile Is Said to Move Toward Sprint Merger at $24 Billion
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T-Mobile US is advancing toward a long-awaited telecommunications union that would value merger partner Sprint at about $24 billion, according to Bloomberg, citing people with knowledge of the matter.

Under the terms being discussed, T-Mobile backer Deutsche Telekom would receive a 42 percent stake and 69 percent voting interest in the combined company, said the people, who asked not to be identified.

At $24 billion, the deal would value Sprint shares at about $6.10 apiece. That value may change depending on stock market fluctuations, since Sprint investors will get stock in the combined company at a fixed ratio. CNBC reported that the price could be about $6.50 a share, in line with Friday’s close. Sprint shares fell as low as $5.56 late Friday and then rebounded to $6 as investors speculated on the deal terms.

The latest discussions follow years of merger deliberations between Sprint and T-Mobile. The two sides restarted talks in recent weeks, about five months after an earlier attempt collapsed. The previous negotiations broke down after the two sides couldn’t agree on how to structure control of the combined entity. The latest talks also could still fall apart as the companies hammer out long-contentious issues.

Further complicating matters: Both companies have foreign owners, and a merger would reduce the U.S. wireless market to three major players. Any new proposal would have to address the concerns that the Justice Department and the Federal Communications Commission had almost four years ago, when they rejected a previous attempt by SoftBank Chairman Masayoshi Son to merge the two carriers. At that time, both agencies took the position that competition could be harmed if the number of national carriers shrank to three from four.