Sprint and T-Mobile are having preliminary merger talks
America’s third- and fourth-largest wireless carriers, T-Mobile (TMUS) and Sprint (S), have revived their merger talks for the third time in four years. The two companies weren’t able to find mutually agreeable terms when the previous merger talks fell through late last year.
Since the deal fell through, Sprint stock has fallen 25% since investors seem worried about whether the company can compete, given its declining consumer base and high debt.
Sprint stock rose after the news
Sprint stock rose 17.1% on Tuesday, April 10, 2018, after rumors about renewed merger talks first broke in the Wall Street Journal. T-Mobile stock rose 5.7% that same day.
The combined entity would have about 127 million customers and would intensify the competition with the top two carriers in the country, Verizon (VZ) and AT&T (T). However, the talks, which are in an early stage, have faced hurdles in the past.
One of the reasons the merger talks fell through last time was the tug of war over the ownership of the combined entity. Softbank owns nearly 85% of Sprint, and Deutsche Telekom has a 63% stake in T-Mobile.
The merger could also face regulatory probes. The first round of merger talks four years ago ended due to antitrust concerns.
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