US telco Sprint in acquisition talks with T-Mobile

20 Sep 2017

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US telco Sprint is in discussion with T-Mobile as it seeks to reap $40-billion in estimated synergies.

According to commentators, the telecom carriers reportedly agree that T-Mobile's controlling shareholder Deutsche Telekom would emerge the majority owner.

Sprint has also accepted that T-Mobile CEO John Legere  would lead a combined entity.

CNBC, which first reported on the talks between the two wireless carriers yesterday, cautioned that an agreement is by no means assured.

That, however did not make any difference to the company's stock.

Sprint, the industry's No 4 company with a 12.8 per cent share, saw its stock jump 6.8 per cent, to close at $8.20. T-Mobile, No 3 with a 16.9 per cent share, rose 5.9 per cent, to $65.42.

But such discussions have not always led to mergers.

In 2014, Sprint and Japanese parent SoftBank walked away from merger talks with T-Mobile and German parent Deutsche Telekom after sensing US regulators would quash any deal that reduced the field from four to three key players.

They intended then to create a stronger competitor to industry leader Verizon, which boasts a 35.7 per cent share, and to AT&T, which has a 33.1 per cent share.

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