Tuesday, November 7, 2017

Softbank to Increase Ownership of Sprint after Merger Discussion with T-Mobile Ceased

Softbank acquired Sprint back in 2014. In the same year, there were talks that the carrier could merge with T-Mobile, but the plan was dropped as the parties predicted regulatory hurdles. Since then, merger talks between T-Mobile and Sprint have been placed on the table and then dropped multiple times. The most recent instance was in September, when news broke that the two were discussing terms of a merger, which would have seen the rise of a combined entity under the control of Deutsche Telecom.

However, new reports stated that the talks had dropped at the end of October. The reason for the talks being dropped was that Softbank’s board did not want to give up control over the wireless carrier to Deutsche Telecom. There were also separate issues regarding the valuation of Sprint’s shares.

On November 4, T-Mobile officially confirmed that it was ceasing a merger discussion with Sprint. In a separate announcement, Sprint confirmed the end of discussion.

Now, as an answer to the question “what next?”, Softbank has announced today that it intends to increase its stake in Sprint through “open market transactions or otherwise, subject to market conditions and other factors”. It also stated that it does not intend to increase its ownership of Sprint outstanding common stock to 85% or more as a result of these purchases.

Masayoshi Son, Chairman & CEO of Softbank Group Corp. and Chairman of Sprint, stated: “We are entering an era where billions of new connected devices and sensors will come online throughout the United States. Continuing to own a world class mobile network is central to our vision of ubiquitous connectivity. Sprint is a critical part of our plan to ensure that we can deliver our vision to American consumers and we are very confident in its future.”

At least for now, this conclusively ends the 2017 merger talks between the third and fourth largest carriers in the American wireless industry. It should be noted, though, that the discussion could theoretically restart any point, if the issues in contention are resolved by the parties involved. In the meantime, both carriers are focused on customer expansion, improvements to their network infrastructure, and looking ahead for the launch of 5G.


Source: Softbank

Share with short URL:

GET 25$ WITH MASTERCARD

Popular Posts