What's the status of the T-Mobile and Sprint merger? It's a date, say deal-closing bankers - PhoneArena

What's the status of the T-Mobile and Sprint merger? It's a date, say deal-closing bankers

What's the viral status of the T-Mobile and Sprint merger? It's a date, say deal closing bankers.
If you have been wondering how will the unfolding coronavirus drama affect the T-Mobile merger with Sprint, the Uncarrier just sent us a memo that clears things up a bit. In April 2018, under the terms of the initial merger proposal, T-Mobile unveiled an all-stock deal that at the time amounted to a $26.5 billion Sprint valuation. 

Just last month, when the stock market wasn't yet infected by the coronavirus, the deal become worth north of $40 billion due to the record stock prices and the T-Mobile share gains in particular.

T-Mobile is 'financially prepared' for a Sprint merger date

Needless to say, with the market sinking to pre-Trump levels, the all-stock swap will now value the merger at much less than $40 billion and T-Mobile. The bridge financing that T-Mobile had secured from the very beginning, however, is alive and kicking, and all institutions that had underwritten the deal remain viable, the carrier told us.

"I’m pleased that right now we have broad support from the banks to finance the closing of this merger - we are very close to unleashing the capabilities of the New T-Mobile, and that is even more important for consumers during the current COVID-19 pandemic," announced John Legere, CEO of T-Mobile. "Our nation is more dependent than ever on connectivity, and we will continue to deliver our essential wireless service today and when we merge with Sprint, with a Nationwide 5G service that is broader and more robust than anything else in America. We can see the finish line and are prepared to close the merger very soon so our teams can get to work building a supercharged Un-carrier."

"We are very happy to have assembled sixteen leading U.S. and global banks in our committed bridge financing for the acquisition of Sprint. This diversification of banks, and the spreading of the committed bridge financing creates a very high-quality bridge," chimed in Braxton Carter, Chief Financial Officer of T-Mobile.

Mike Sievert, President and Chief Operating Officer of T-Mobile, summed it all up:

Those quotes are not just PR talk, either. After New York, the California Attorney General Xavier Becerra announced that his office has reached a settlement with T-Mobile on the points below, and the California Public Utilities Commission (CPUC) sent out a proposal that the merger of Sprint and T-Mobile be approved on these conditions, too:

  • Make low-cost plans available in California for at least five years, including a plan offering 2 GB of high-speed data at $15 per month and 5 GB of high speed data at $25 per month.
  • Extend for at least an additional two years the rate plans offered by T-Mobile pursuant to its earlier FCC commitment, ensuring Californians can retain T-Mobile plans held in February 2019 for a total of five years.
  • Offer 100 GB of no-cost broadband internet service per year for five years and a free mobile Wi-Fi hotspot device to 10 million qualifying low-income households not currently connected to broadband nationwide, as well as the option to purchase select Wi-Fi enabled tablets at the company’s cost for each qualifying household.
  • Protect California jobs by offering all California T-Mobile and Sprint retail employees in good standing an offer of substantially similar employment. T-Mobile also commits that three years after the closing date, the total number of new T-Mobile employees will be equal to or greater than the total number of employees of the unmerged Sprint and T-Mobile companies.
  • Create approximately 1,000 new jobs in California with a customer service center in Kingsburg.
  • Increase diversity by increasing the participation rate in its employee Diversity and Inclusion program to 60 percent participation within three years.
  • Reimburse California and other coalition states up to $15 million for the costs of the investigation and litigation challenging the merger.

The coronavirus lockdown may actually improve the T-Mobile/Sprint merger status with authorities

Notice the 100GB no-cost Internet to low-income households and blanketing the rural areas requirement? Well, according to analysts, T-Mobile could boost its standing with the authorities immediately with the measures it took to ease the burden of those locked up home by the coronavirus measures.

T-Mobile is going beyond just waiving some taxes and announced that all its customers, including Metro by T-Mobile customers, who have plans with data will have unlimited smartphone data for the next two months. The offer does not include roaming data.

On top of that, both T-Mobile and Metro by T-Mobile customers will receive an additional 20GB of mobile hotspot/tethering service for two 60 days. This specific offer is not available right away, but it should go live in the coming days.

And for those who have friends or family members living in countries that were heavily hit by the coronavirus pandemic, T-Mobile announced that it offers free international calling for all customers to Level 3 impacted countries, which includes China, Iran, Venezuela, South Korea, and most European countries. That's got to count for something in the eye of the beholder, and a spring merger date may still be on the cards as planned.
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