As final details around the merging of US carrier Sprint with US un-carrier T-Mobile are being ironed out
, Bloomberg reports that Japanese carrier SoftBank (Sprint owner) CEO, Masayoshi Son, is asking banks to commit financing for "a longer-than-usual amount of time", as those involved in the $32b deal expect "a lengthy approval process". According to people in the know, said process could stretch out to a full year after the merger's official announcement. Reportedly, the banks have given Softbank and Deutsche Telekom (T-Mobile owner) 18 months to secure the deal, otherwise they won't provide funding.
If the planned merger fails, regardless of reason, T-Mobile is eligible to receive $1 billion or more in break-up fees. AT&T, which attempted but was not allowed to take over T-Mobile in 2011, has done this exercise already. The merging effort, which was ultimately rejected by the FCC, made a difficult year for AT&T CEO Randal Stephenson, whose total compensation for the year marked an 18.5 drop due to the failed merger and other circumstances.
Masayoshi-sama would like the deal to move a little quicker.
However, history doesn't seem to bother Masayoshi Son who's quite intent on acquiring T-Mobile, even though the regulation authorities remain in favor of the current four big competitors status-quo. Both SoftBank and Deutsche Telekom have acknowledged they are ready to take a possible FCC rejection to the court if they have to. But AT&T had the same fighting words before it backed down from a court case later in 2011.
None of the parties involved, such as the carriers themselves, the FCC, and financial behemoths Goldman Sachs, JPMorgan and Deutsche Bank have commented on the rumor at this time.