But that doesn't mean this is the end of the line for M&A negotiations between the third- and fourth-largest US mobile operators.
The reported breakdown of the Sprint/T-Mobile merger talks is being blamed on ego clashes at the top of Deutsche Telekom and SoftBank, but may not mean the end of the drawn-out M&A negotiations, according to a source that spoke to Light Reading on Monday.
Sprint Corp. (NYSE: S) owner SoftBank Mobile Corp. is planning to break off talks with Deutsche Telekom AG (NYSE: DT) over a proposed merger between Sprint and T-Mobile US Inc. , Japanese newspaper Nikkei Asian Review reported Monday afternoon. The falling out is said to be over which company has the controlling stake in the merged company, with DT wanting a majority stake while the Japanese company is unwilling to cede control.
The talks are said to have become "a little hostile and personal," according to an anonymous source that spoke to us Monday. "There are some ego elements that are clouding the deal," the source added.
The problems are said to be between some of the upper echelons of Deutsche Telekom management and SoftBank CEO Masayoshi Son, with arguments and walkouts occurring at some of the meetings.
Nonetheless, "ultimately, cooler heads will prevail," the source suggested, calling the possible cessation of talks "more of a negotiation tactic" by SoftBank.
Although "it may not happen," the source stated that the long-awaited and much-talked-about deal is still 75%-80% likely. Of course, even if the companies do eventually agree to merge, there are still regulatory hurdles to jump, and the small matter of network integration.
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