Report: No Breakup fee in Sprint/T-Mobile Merger

Reports about the upcoming Sprint and T-Mobile merger have been coming fast and furious as of late. Late last week it was reported that a deal would be official before the end of the month and could be announced with the carriers' quarterly earnings. Now, it appears that some of the details of the deal are starting to surface, and it appears that the deal would not include a breakup fee. A breakup fee is a fee that one party (usually the one buying the other) would have to pay to the other party if the deal doesn't go through for some reason. AT&T had to pay a rather hefty breakup fee to T-Mobile back in 2011 when that deal went south, and even had to give T-Mobile a big chunk of spectrum.

The lack of a breakup fee means that both sides could urge regulators to approve the deal, without it helping one side over another. This merger, even if T-Mobile, Deutsche Telekom, Sprint and SoftBank, are able to agree to terms, still needs to go to regulators for approval. AT&T did not get approval to buy T-Mobile from Deutsche Telekom back in 2011. And in 2013 when SoftBank was looking to buy T-Mobile and merge it with Sprint, regulators told them that they would not approve such a deal. However, now under a new administration, the feeling is that regulation will be scaled back a bit, something that President Trump campaigned on, and has already been doing in other areas. Thus, the two carriers are trying to hatch a deal again.

If the acquisition does go through, the combined company is still said to be run by T-Mobile's current CEO, John Legere. Deutsche Telekom would also have a majority stake in the company, which is a bit of a surprise, after Deutsche Telekom wanted out of the US entirely, just a few years ago. SoftBank wants a large enough stake to where Masayoshi Son is able to call some of the shots, but that seems unlikely if Deutsche Telekom is majority owner of the new combined company. Of course, all of this should be made official in the next few weeks if the recent reports are indeed correct.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]