T-Mobile, Sprint Plan to Leave Divestitures for Later

Another week has passed which means another incremental revelation about the likely deal between T-Mobile US and Sprint. This week’s installment comes from Reuters, which reports that the two wireless companies are aiming to announce a merger agreement that includes neither plans to sell assets nor a cap on possible divestments.

They might have announced asset sales in order to pre-empt objections from regulators that might arise in the review process. Comcast did that when it tried to buy Time Warner a few years ago, but of course it didn’t work. By not taking this path, they clearly plan to set up some epic deal-making with the regulators of the Trump administration.

In this case, we are probably talking mostly about all-important spectrum holdings. When combined currently, the two companies would have spectrum holdings that exceed that of their two main rivals, AT&T and Verizon.

Yet it wasn’t a concentration of spectrum that torpedoed previous attempts to consummate a merger between these two companies last time. Rather, it was that regulators saw four as a better number than three. That may have become negotiable with the changing of administrations earlier this year, however, which is why we are all here yet again.

It’s a bit of a slow motion deal though.  The word is still that Sprint wouldn’t be getting much of a premium and that there probably won’t be a break-up fee this time.  Any actual announcement is still probably a couple weeks away, but it feels like few currently doubt there will be one.

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Categories: Mergers and Acquisitions · Wireless