Not regulators, but jostling for control behind the failed Sprint merger with T-Mobile

Not regulators, but jostling for control behind the failed Sprint merger with T-Mobile
Sprint's merger with T-Mobile didn't go through not because the carriers were afraid that the deal will face too much anti-monopoly backlash from the regulators, and they'll have to make too many concessions, as was the official explanation, but rather because the carriers' parents couldn't agree about the custody rights. 

T-Mobile's Deutsche Telekom owner, it turned out, planned to keep the controlling stake in the resulting mobile industry behemoth, which didn't sit well with Softbank's Masayoshi Son, who happens to be the current chairman of Sprint Corporation, too. Not only that, but Sprint's boss wasn't very happy with the valuation given to his budding empire, and balked at the counteroffers, ultimately dooming the whole thing.

"We were dancing. It was really exciting. We exchanged a kiss on the cheek. And then our parents saw that and sent us back to our rooms," said Sprint's CFO Tarek Robbiati during an investor conference last week. "Jokes aside, look, it was – pretty much it boiled down [to] a core decision that Masa made." Masa, it turns out, is Sprint's chairman Masayoshi Son.

Too bad, as the synergies both carriers would have achieved turned out even greater than analysts expected. As per Braxton Carter, T-Mobile’s chief financial officer, a merger with Sprint would have saved the companies $40 billion in operating expenses, as opposed to the $30 billion that was the analysts' consensus estimate. "Unfortunately, for a variety of reasons, we ultimately couldn’t come together with terms. And we certainly tried, but it was definitely a complicated situation," commented Mr Carter.

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6 Comments

1. Soundjudgment

Posts: 370; Member since: Oct 10, 2016

“There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?”

2. andrewc31394

Posts: 290; Member since: Jun 23, 2012

Thank god this didn't go through. Sprint is horrendous all around and more competition is always better

3. bearballz

Posts: 34; Member since: Mar 17, 2017

Absurd comment. Where I live Sprint is just fine.

6. kurosaki9870

Posts: 4; Member since: Nov 26, 2017

Ah yes, the "I haven't dealt with that so it must be false" argument

4. rebretz

Posts: 114; Member since: Dec 26, 2011

Since Softbank purchased Sprint and Masayoshi Son took over as chairman Sprint has gone from number 3 to number a distant number 4. Why on earth did he and Softbank think they should have the majority control? Since 2011 T-Mobile has added about 40 million new subscribers while Sprint has basically the same number.

5. Greenmule

Posts: 129; Member since: Apr 24, 2017

"Why on earth did he and Softbank think they should have the majority control?" Two reasons: 1) Ego 2) Culture clash. Many years ago, when I was in Bangkok, everything was bartered. If I was the first customer of the day, and I did not barter and buy something, then if I went back to that store later the same day, no one would speak to me. I was "bad luck". For Masayoshi Son, the bartering had just started. For Tim Hottges and Deutsche Telekom, the talking was finished and it was time to d or rr.

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