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Sprint to acquire T-Mobile for $32 billion


According to several reports, Sprint is set to acquire T-Mobile for $32 billion which would lead to a merger of the 3rd and 4th top wireless carriers in the United States.sprint-logo

The $32 billion deal is likely to be announced by summer and will require U.S regulatory approval. The Federal Communications Regulations called off the deal between Sprint and T-Mobile citing anti-trust concerns. Softbank which owns Sprint has promised Americans that there would be price war if the deal takes place. The deal was delayed several years by the anti-trust regulators and will emerge as a competitor to AT&T and Verizon, the major players in the wireless market.

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T-Mobile has been offered a 17 percent premium on the current worth of share value on Wednesday. The company will receive $40 per share in valuation for the 32 billion deal. However carriers who own a stake in T-Mobile will see their control diminishing after the deal due to a lower stake. Deutsche Telekom’s 67 percent stake will be reduced to 15 to 20 percent stake in case of a merger. The Destche Telekom is not opposed to the merger as the deal could bring in billions of dollars.

The Chief of the Justice Department’s Antitrust Division has mentioned recently that any merger between the top four wireless companies would have a hard time gaining approval. In 2011, regulators opposed the deal of AT&T which offered $39 billion for T-Mobile’s acquisition and deal was called off. Regulators might consider the merger as the deal is between the wireless carriers who are 3rd and 4th in the market.

Regulators will decide on the merger based on arguments from Sprint and Softbank as there will be concerns regarding the lack of competition in the market. Sprint has argued that the merger would further increase he competition as Sprint will be a major player to AT&T and Verizon. Masayoshi Son, CEO of Softbank has been trying to complete the deal for several months to compete with AT&T and Verizon.

“Antitrust enforcers fantasize in the middle of the night about the disruptive forces that can spur competition. T-Mobile has been aggressive beyond any enforcers fantasies. Its going to take a lot to convince them that a merger would make it more disruptive,” said David A. Balto, a Washington Antitrust lawyer at Justice Department and Federal trade Commission.

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About Bhanu Jamwal

bhanu@thenextdigit.com'
Living in Aldine, TX, he writes about Mac, iOS, Android and IT Hardware. Apart from writing on The Next Digit, he is also an expert in providing valuable seminars on IT Peripherals and IT Security. All posts by Bhanu

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