Sprint Is Looking To Secure $50 Billion To Purchase T-Mobile

Advertisement
Advertisement

Sprint is looking to cut the wireless provider competition down to three.   As Sprint looks to pursue their attempts at taking over their fourth-place competitor, it would seem that they are gaining some financial traction.  T-Mobile is currently valued at $26 billion at their current stock price, which has only risen since the rumors of a Sprint takeover began to surface.  As with any takeover, Sprint would not only have to cover that price, but have to pay a premium to acquire the entire corporation.  T-Mobile's current debt, which is estimated at around $20 billion, will also need to be covered in the buyout. Looking at the numbers, we can see that Sprint would have to cover a price of around $46 billion, as well as pay a premium.  AT&T's efforts to acquire the 'UNcarrier' for $39 billion some years ago were shot down by the Justice Department, and the odds of the FCC and the SEC approving such a large takeover by Sprint is equally unlikely.  If the wireless carrier industry was cut down to only three major choices instead of four, it would not be looked at positively for consumer choice.

SoftBank CEO Masayoshi Son, the architect behind SoftBank's acquisition of Sprint, is not known for being held back when it comes to big moves.  His aggressive attitude and availability of funds makes it entirely plausible that Sprint may go for the purchase anyways, even if the chances of success are minimal.  The interesting bit here is why exactly Sprint is buying T-Mobile.  By all levels of merit, it should be the other way around.  T-Mobile has been growing rather quickly since Q2 of last year, and Sprint has slowly been shrinking during that time.  T-Mobile's networks have grown stronger and more reliable, and at a much faster rate than Sprint's.

Advertisement

Such a deal would mean big things for the US wireless market and not all of them good. T-Mobile has been the only force in the last few years to actually shake up the mobile market.  T-Mobile has been keeping the 'big boys' of the industry on their toes, and that can only be a good thing.  While T-Mobile does not yet have the best nationwide coverage, they are growing quickly, and under their current leadership it is entirely possible that in five or ten years they may be able to challenge the 'best in the business' AT&T and Verizon.  What do you think?  Is there a chance this merger could go through? Would you like to see a Sprint-T-Mobile combination facing AT&T and Verizon?  Let us know in the comments!

Source: WSJ
Via: Android Central