SoftBank willing to give up control of combined Sprint

While SoftBank is still open to discussing other options, it is now willing to surrender control of Sprint and retain a minority stake in a merger with T-Mobile, the sources said. That deal, however, was batted down once US antitrust regulators got a whiff of what the combined company would do to competition. T-Mobile said it had 71.5 million total customers while Sprint had 59.5 million at the end of 2016.

After trying to merge with T-Mobile in 2014, SoftBank may once again make a serious attempt at merging T-Mo and Sprint.

Now, Reuters reports that SoftBank, the company that owns 83 percent of Sprint, is preparing to start negotiations with Deutsche Telekom, all in hopes of merging Sprint and T-Mobile.

T-Mobile is the larger of the two carriers, with $37.2 billion in sales previous year, compared with $32.9 billion in revenue for Sprint over the past 12 months.

If this ends up happening, it would also mean that DT would be in control of the resulting entity and thus T-Mobile's management will be in control, that is provided that regulators don't block the deal. SoftBank would still have a minority stake in the merged company under this scenario, but it's unknown how large or small that share would be. It is a concession from Sprint that T-Mobile's management team (led by president and CEO John Legere) is the superior one of the two. But Reuters, which pinned the report on people familiar with the matter, said merger discussions could begin in April.

Stocks of both T-Mobile and Sprint received a surge following the news. Sprint closed at $9.30, up 3.33% percent. While details remain scarce, the FCC is now holding a 600MHz spectrum auction until April, and accordingly has imposed some strict anti-collusion rules that prevent acquisition discussions between rivals until the airwave auctions end. The carriers are in the middle of bidding for an airwave auction, and the FCC forbids any chats between competitors until that auction is finished because of its anti-collusion rules.

Related News: