T-Mobile Signs Contract to Acquire Sprint for $26 Billion

T-Mobile and Sprint are amongst the top telecom operators in the American Telecom industry. Both the telcos are involved in merger talks for more than four years. After keeping the merger to just talks three times, T-Mobile and Sprint today announced the combining of business operations in the United States. With this merger, Deutsche Telekom is reinforcing its business in the United States. However, the regulatory approvals will surely come into play like they did with the AT&T and T-Mobile merger back in 2011. That said, this move brings down the total telecom operators in the United States to three from the earlier four players. T-Mobile has stated that they have signed a contract to acquire Sprint for $26 Billion. The value of the new company (enterprise value) is around $150 billion, with expected synergies with a net present value of some $43 billion.

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The newly merged entity T-Mobile US will have around 127 million customers and revenue of around $76 billion, based on the expected figures for 2018. Verizon Wireless is currently the top telecom operator in the US with over 150 million subscribers followed by AT&T with 141.6 million subscribers as of Q4 2017.

For the unaware, Deutsche Telekom currently holds 62% of the shares in T-Mobile US. Softbank’s shareholding in Sprint accounts for around 83% of the company’s equity. The remaining shares in both of the American companies are currently in free float. On completion of the transaction, Deutsche Telekom will hold around 42% of T-Mobile shares. Softbank will have a 27% stake. The remaining approximately 31% of shares in T-Mobile US will be in free float.