OVERLAND PARK (dpa-AFX) - T-Mobile has reportedly signed a merger deal with Sprint. T-Mobile parent would control the combined company and T-Mobile President and CEO John Legere is expected to run the combined entity.
According to WSJ, T-Mobile will exchange 9.75 Sprint shares for each T-Mobile share. T-Mobile parent Deutsche Telekom will own 42% of the combined company and Sprint parent SoftBank Group will own 27%. The remaining 31% will be held by the public.
The all-stock deal would merge Sprint, which has a market value of $26 billion, with T-Mobile, which has a market value of $55 billion. The merger would create the No. 3 US cellular carrier, behind Verizon and AT&T, however, it could end the ongoing competitive pricing.
Deutsche Telekom would also control voting rights over 69% and appoint nine of its 14 directors. The companies said they hope to close the deal in the first half of 2019.
T-Mobile has about 73 million subscribers and Sprint around 54 million, which compares to 141 million subscribers for AT&T and 162 million subscribers for Verizon.
Both the companies consider merger as the best way to go forward as it will help them be in a better position to compete with AT&T and Verizon in the forthcoming 5G race.
'It's a very simple rule of business. Both companies need each other. The reason why this is going to work is that T-Mobile cannot do the 5G strategy without Sprint and Sprint cannot do it without T-Mobile,' said Sprint CEO Marcelo Claure according CNBC report.
'Convergence between mobile broadband and cable isn't just a hypothetical,' said T-Mobile CEO John Legere. 'It's a reality of our business on a day to day basis.'
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