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Sprint, T-Mobile nearing $32 bn merger
MUMBAI: Telecommunications company Sprint Corp is reportedly closing in on its $32 billion acquisition of the wireless network operator T-Mobile.
As per the proposed merger agreement, Sprint will pay $40 a share to buy T-Mobile. The deal proposes to combine US’ third and fourth largest telecom carriers.
Under the agreement, Sprint would offer about 50 per cent stock and 50 per cent cash for T-Mobile, leaving its parent company Deutsche Telekom with about a 15 per cent stake in the combined company. The deal will also include a $1 billion breakup fee that Sprint will pay T-Mobile should the deal not go through.
Sprint is owned by Softbank Corp, while Deutsche Telekom owns 67 per cent of T-Mobile.
As per reports, Softbank Chairman Masayoshi Son has been eager to buy T-Mobile and merge it with Sprint, creating a carrier with the resources to upgrade its network and better compete with market leaders AT&T Inc and Verizon Wireless.
But the US Federal Communications Commission and Justice Department have raised concerns about such a tie-up, revolving around the risk that it could raise prices for consumers.
The regulators had rejected AT&T’s $39 billion takeover bid for T-Mobile US in 2011.