Japan's SoftBank reconsiders merger of Sprint with T

Oct 31, 2017, 00:35

SoftBank is expected to approach T-Mobile owner Deutsche Telekom as early as Tuesday to propose ending the negotiations, the report said. Sprint shares fell 9 percent following a report from the Nikkei that Softbank might be backing off from a potential agreement; T-Mobile shares fell 5 percent.

Failure to agree on favorable ownership terms will result in SoftBank calling off merger talks between Sprint and T-Mobile, according to sources who say the change may happen tomorrow.

A merger between the two carriers could still eventually occur, of course-SoftBank's decision to walk away may be a negotiating tactic-but one looming question is whether Sprint can thrive in the USA wireless market.

In the latest round, reports said the German parent group had insisted on a majority stake and that SoftBank did not want to cede control. Some at SoftBank were initially amenable as long as the Japanese company retained some influence. It seems that SoftBank's executives aren't on board with that idea and voted to call off the talks.

SoftBank and Deutsche Telekom don't trade on Wall Street, but SoftBank stock was down three percent on foreign markets. Supposedly, Sprint plans to make significant investments in its network, instead of perusing a merger.

The two firms had held talks in 2014 on a merger but ended discussions in the face of opposition from U.S. regulators.

Sprint and T-Mobile previously gave up an attempt to merge in 2014 due to concerns about regulatory challenges from the Obama administration.

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