Sprint, T-Mobile agree to merge

April 30, 2018

New York- Sprint Corp. and T-Mobile US said Sunday that they have agree to merge, a deal that represented efforts by Sprint parent Softbank Group Corp. to create a company that can better compete against two larger rivals in the US wireless market.

The merger agreement, if approved by US regulators, will create a company with 127 million customers that will be a serious competitor to Verizon Communications Inc. and AT&T Inc.

The transaction will give T-Mobile owner Deutsche Telekom a 41.7 percent stake in the merged company, and Softbank, a Japanese telecommunications and investment firm, 27.4 percent.

Softbank acquired Sprint, the fourth-largest US wireless company, for $21.6 billion in 2013.

Soon after the acquisition, the Japanese company proposed a merger between Sprint and T-Mobile, the third-largest carrier, but gave up the idea at the time because of little prospect of winning regulatory approval.

A second attempt to achieve the merger fell apart in autumn last year as Softbank and Deutsche Telekom failed to reach an agreement on which side would have majority ownership of a merged company.

This time, Softbank Chairman and Chief Executive Officer Masayoshi Son put priority on creating an entity that can intensify competition with the top two carriers over taking control of a merged company.

His compromise also reflected a change in his business strategy. Softbank has been stepping up investments in promising fields such as semiconductors, medical care and space globally.

"Son's mind is occupied with investments in high technology such as artificial intelligence and robots, and his interest in wireless services has been waning rapidly," an analyst said.

Sprint and T-Mobile agreed to merge in an all-stock transaction at a fixed exchange ratio of 0.10256 T-Mobile share for each Sprint share, or the equivalent of 9.75 Sprint shares for each T-Mobile share. The transaction is expected to close no later than the first half of 2019, the two companies said.

T-Mobile CEO John Legere will serve as CEO of the merged company, New T-Mobile. The new company's board of directors will also include Son and Sprint CEO Marcelo Claure. Jiji Press