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Source: Egos 'Cloud' Sprint/T-Mobile Talks

Dan Jones
10/30/2017

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.

For more:

  • Sprint, T-Mobile Tie-Up Would Create Network Powerhouse
  • Sprint Narrows Loss, Avoids T-Mobile Questions
  • T-Mobile Ducks Q3 Call to Dodge Sprint M&A Questions
  • SoftBank Enters Tower-Leasing Business in US
  • A T-Mobile/Sprint Merger: Would It Spur Competition?
  • T-Mobile, Sprint in Merger Talks, Again – Report

    — Dan Jones, Mobile Editor, Light Reading

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    kq4ym
    kq4ym
    11/11/2017 | 9:47:59 AM
    Re: Combined they'd have nearly $70B debt
    It would seems it just more of fairly typical negotiaton ploys going on here. As the odds are still have the deal may go through it's just a matter of getting through ultimately the "regulatory hurdles to jump, and the small matter of network integration." 
    DanJones
    DanJones
    11/2/2017 | 1:13:42 PM
    Re: Combined they'd have nearly $70B debt
    I suspect that if there is an official announcement of any sort, which is probably unlikely anyway, it'll be after market on Friday to try and stem Sprint's share slide. Happy weekend!
    DanJones
    DanJones
    11/2/2017 | 12:05:34 PM
    Re: Combined they'd have nearly $70B debt
    There are definitely people that agree with your reasoning here.
    Phil_Britt
    Phil_Britt
    11/1/2017 | 12:18:52 PM
    Re: Combined they'd have nearly $70B debt
    Those big egos may be pressured by the mounting need to consolidate in order to start cutting into the debt that the companies have to deal with.
    DanJones
    DanJones
    11/1/2017 | 10:53:16 AM
    Re: Combined they'd have nearly $70B debt
    Lotsa BIG egos in that room, one guesses!
    danielcawrey
    danielcawrey
    10/31/2017 | 3:15:01 PM
    Re: Combined they'd have nearly $70B debt
    Why does this not surprise me?

    Honestly, this is why I thought the talks broke down last time. In order to negotiate properly, you have to not take things personal. Seems like that has happened here. 
    DanJones
    DanJones
    10/31/2017 | 11:27:27 AM
    Re: Combined they'd have nearly $70B debt
    T-Mobile US CFO has voiced a lot of concern about taking on Sprint's debt structure over the past year for sure.
    DanJones
    DanJones
    10/31/2017 | 11:27:05 AM
    Re: Combined they'd have nearly $70B debt
    T-Mobile US CFO has voiced a lot of concern about taking on Sprint's debt structure over the past year for sure.
    mendyk
    mendyk
    10/31/2017 | 9:19:00 AM
    Re: Combined they'd have nearly $70B debt
    Softbank is built on an iceberg of debt.
    tyrellcorp
    tyrellcorp
    10/31/2017 | 9:04:43 AM
    Combined they'd have nearly $70B debt
    Baffling that DT/TMO would want to deal with that much debt.  The only competition we'd have is which carrier raises rates less rapidly - they all will over time.
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