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Sprint and T-Mobile have agreed to "broad outlines" of a $32 billion merger

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Sprint and T-Mobile have agreed to "broad outlines" of a $32 billion merger
The rumors about a potential Sprint/T-Mobile merger (which is to say a Softbank/Deutsche Telekom merger) have been circulating for quite a long time, though they have been picking up steam recently. Now, The Wall Street Journal is reporting that the deal may be close to complete as the two sides have agreed on "broad outlines" regarding a deal which values T-Mobile at $32 billion. Supposedly, the deal could be finalized this summer, and the terms right now have Sprint (aka Softbank) paying $40 per share to buy T-Mobile (a Deutsche Telekom property), which adds up to $32 billion in total. This is slightly less than the $40 billion rumored early in the week. 

Of course, a deal like this has quite a lot of hurdles to jump even if Sprint and T-Mobile do come to a full agreement on terms. The number one issue surrounding this potential merger is the same issue that caused AT&T's bid to purchase T-Mobile to fall through. This deal would mean even more consolidation in the mobile carrier market, which would mean less competition, and potentially higher costs for customers. Back in January, the US Department of Justice was reported to already be "skeptical" of a deal between the two companies, and it's hard to imagine that much has changed since then. 

The potential of failure in this endeavor has already been discussed though. As of now, the deal supposedly stipulates that if the merger is rejected by regulatory bodies, Sprint would owe T-Mobile $1 billion and "other assets". This is quite a bit less than the break-up fee that AT&T had to pay when that deal fell through, which was $3 billion plus a roaming deal

There is always a chance that the deal will be approved though. There is thinking that right now is the time to strike for Sprint, because the FCC spectrum auctions that are happening and the net neutrality debate are working against smaller carriers, and this merger would remove the two smaller carriers from the board and replace it with one that could compete (or collude) with AT&T and Verizon. 

source: WSJ

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