Sprint and T-Mobile Call Off Merger Plans

Over the weekend, T-Mobile and Sprint announced that plans for their merger have come to an end. Both companies failed to reach “mutually agreeable terms” which eventually led to the whole merger being called off.

Rumors had pointed to SoftBank, Sprint’s parent company, afraid of losing ownership of the newly merged company as T-Mobile’s parent company Deutsche Telekom wanted the controlling stake in the newly merged entity. The latter even submitted a revised offer to help save the merger but the deal eventually fell through.

T-Mobile’s CEO John Legere said that the potential merger of the two companies was compelling as it would have led to significant benefits for customers and value for shareholders. However, the Un-carrier also wanted a deal which would have resulted in long-term benefits for its shareholders and allowed it to maintain its record of outstanding performance and disrupting the wireless industry in the United States.

Below is what Sprint’s CEO Marcelo Claure had to say about the merger discussions falling through:

“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination.  However, we have agreed that it is best to move forward on our own. We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth.  As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries.  We are determined to continue our efforts to change the wireless industry and compete fiercely.  We look forward to continuing to take the fight to the duopoly and newly emerging competitors.”

Sprint’s parent company SoftBank had tried to acquire T-Mobile for more than $20 billion back in 2013 but the deal fell through due to regulatory issues. Thus, it was likely that even if the merger plans of T-Mobile and Sprint had gone through, it would have hit a roadblock while trying to gain the necessary regulatory approval.

[Via T-Mobile]