AT&T and DirecTV, Comcast and Time Warner, Verizon and Vodafone — it seems like this has been the year of mergers and acquisitions. Now, one more might be joining the list after years of talks: that of Sprint and T-Mobile.
The third- and fourth-largest wireless phone carriers have reportedly finally laid out the groundwork on a merger that could happen as early as this summer. The pricetag? Sprint would pay $40 a share for T-Mobile stock. In other words, almost $32 billion. (Via Sprint, T-Mobile)
Both companies are majority-owned by international telecom groups — Sprint by SoftBank of Japan and T-Mobile by Deutsche Telekom of Germany.
"[Son] is making a credible case that they not only need scale to compete more effectively in the wireless industry but could also offer new and needed competition for wired broadband."
One major hurdle for the deal is the Federal Communications Commission, which, along with the Justice Department, shot down a bid by AT&T to buy T-Mobile in 2011. They argued the U.S. market needed four national carriers to be competitive.
But with AT&T and Verizon so far ahead in the market, The Wall Street Journal writes that Sprint's argument would likely be "that a deal takes the country from two real competitors to three, not to three from four."
And Forbes writes that AT&T's recent deal for DirecTV is said to "have made both Sprint and T-Mobile executives confident that the move will be approved."
Bloomberg reports that although the rumored deal is incomplete and may very well still fall apart, "there's still a lot of work to be done before a deal is completed, including deciding management of the new entity."
Bloomberg spoke with Sprint's CEO Dan Hesse last month and asked whether he'd want to lead the new company. Although he said he still has fire in the belly, he wouldn't mind stepping down, either.
BLOOMBERG: "But it sounds at the very least that it wouldn't bother you if you didn't run the merged company."
HESSE: "No, it wouldn't. I'm not saying what would or wouldn't happen or what have you, but no, it wouldn't."
Although an analyst who spoke to The New York Times put the chances of the deal gaining regulatory approval at 10 percent, an analyst who spoke to Bloomberg put it at 30 to 40 percent.