Merger of T-Mobile US and Sprint
Author: Mario Schmidtgen
New competitor as a condition
With the merger of T-Mobile US and Sprint, two of the four largest mobile operators in the United States have joined forces. Despite the antitrust controversy, a compromise has now been reached that approves the negotiations. The merger amounts to over 26 billion dollars.
The condition of the ministry of justice in Washington was the commitment of the two companies to sell comprehensive business units and radio frequencies. This is intended to secure competition in the mobile communications market in the USA, which is dominated by a few providers. Some US states are still trying to prevent the merger by means of legal proceedings because of feared disadvantages for consumers and employees.
Exactly prepaid brands from Sprint such as Boost and mobile radio frequencies shall be sold to the satellite TV operator Dish. Dish is paying five billion dollars for both, according to US media. The company will thus become the new fourth force in the US market for telephone providers. A new competitor was a prerequisite for the approval.
Now the agreed compromise only needs to be approved by the court. The deal was already agreed in April 2018 and has been cancelled twice by the companies. On the basis of earlier company data, a combined annual turnover of more than 70 billion dollars can be determined with an added customer number of around 127 million customers.
As part of the merger, Deutsche Telekom will acquire 42 percent of the shares, the largest part of the newly created company. In return, Sprint shareholders will receive a $26 billion block of shares. Despite the shareholding of less than 50 percent, Deutsche Telekom has the upper hand with 69 percent of the voting rights.