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Sprint-T-Mobile Merger Mystery: Why Wait Until July?

By Craig Galbraith
June 06, 2014 - News

**Editor's Note: Please click here for a recap of the biggest communications mergers in Q1 2014.**

A report this week revealed that Sprint has agreed to pay $32 billion for T-Mobile USA, so one might wonder why the companies reportedly are waiting at least another month to formally announce it.

At least that’s what Yankee Group analyst Rich Karpinski wants to know. 

“Yes, things are moving fast, but we always expected they would. What's new, at least in terms of rumors? A floated per-share price means things continue to move along nicely and the two sides are assessing the value equation similarly," noted Karpinski, commenting specifically on a Reuters article. “We also saw a breakup fee floated in stories [on Thursday], which shows T-Mobile and DT's experience with deals falling apart (Sprint reportedly wants it to be $1 billion, while T-Mobile is pushing for $3 billion). The only mystery now is why the two companies seem to be holding out for a July announcement. What will be the focus of the next month? Likely a final lobbying push to ensure as much as possible that the deal passes regulatory muster."

That lobbying effort might be key to getting the deal done. Regulators will no doubt examine this deal very closely, considering it would reduce the number of major U.S. wireless operators from four to three. AT&T, America’s second-largest wireless provider, failed in its attempt to buy T-Mobile a couple of years ago. The tie-up between Sprint and T-Mobile would combine the third- and fourth-largest operators. 

Follow senior online managing editor @Craig_Galbraith on Twitter.

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