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T-Mobile US and Sprint merger rumour of the day: it’s back on!

Deustche Telekom T-Mobile T

It is being reported that T-Mobile US and Sprint might be set to merge. This is only the 400th time such a move has been rumoured in the past few years.

The author of this latest rumour is CNBC, which has sources that say suitably generic things such as ‘talks are ongoing’ and ‘yeah, sure, why not?’ (see below). Apparently parent companies Deutsche Telekom and Softbank like the idea of a merger with the ascendant TMUS the dominant partner.

One of the many potential sticking points is apparently the desire of the Softbank boss – Masayoshi Son – to have a significant say in how the resulting company is run, which seems fair enough since it’s a merger and if DT doesn’t like it why doesn’t it just buy Sprint already? Other things that could scupper the deal yet again are regulatory and competition concerns and just the usual failure of fat cats to see eye to eye.

There is, of course, a rich history of TMUS/Sprint rumours. Only last June it was reported that DT fancied the idea and earlier this year Sprint was said to be positioning itself to make a move. Back in 2014 Sprint was on the verge of dropping around $30 billion on TMUS… until it wasn’t.

Rumours such as these are often controlled leaks from the protagonists themselves looking to see how the markets respond in a manoeuvre known as a trial balloon (or even kite flying). At time of writing TMUS shares were up 5% and Sprints were up 9% so it looks like investors are up for a bit of M&A action.

 

T-Mobile, Sprint in merger talks: Sources from CNBC.


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