**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from August.**
Sprint and T-Mobile reportedly are closer than ever to merging, potentially announcing a deal at the end of this month.
The two carriers are conducting “final due diligence” to decide on the exchange ratio that will determine Sprint’s valuation, citing people who asked not to be identified because the discussions are private, according to a Bloomberg report. Setting the stock-for-stock swap price between the two companies will be one of the last steps to sealing the merger, it said.
Sprint and T-Mobile also are continuing discussions around non-cash items, such as where the combined entity’s headquarters will be located and executive management, according to the report.
Neither Sprint nor T-Mobile would comment. For several months there’s been a steady stream of reports speculating on a merger and how it would impact the industry.
Rich Karpinski, 451 Research’s principal analyst of mobile operator strategies, tells Channel Partners it does look like the deal will finally get done, “at least in terms of an agreement between the two companies on price and ownership/leadership structure.”
“It’s not surprising to see this finally being worked out as Sprint is a very eager seller and T-Mobile – while operating from a position of great strength – needs the added heft that Sprint brings it to prepare for the next wave of competition with AT&T and Verizon,” he said.
A CNBC report said some T-Mobile shareholders are unhappy with the proposed exchange ratio for the stocks.
Last month, a Reuters report said T-Mobile was close to agreeing to tentative terms on a deal to merge with Sprint. And before that, German publication Handelsblatt reported that T-Mobile’s Germany-based parent company, Deutsche Telekom, was preparing a plan to merge with the Overland Park, Kansas-based mobile carrier.