Sprint Calls Off T-Mobile Merger, Announces Marcelo Claure As New CEO
Investors are parting ways with T-Mobile (NYSE: TMUS) and Sprint (NYSE: S) shares after several media outlets reported that Sprint is no longer interested in a merger. Bloomberg also reported that Sprint will announce a new CEO as soon as Friday.
Re/code reported Friday morning that CEO Dan Hesse would be replaced as CEO by Brightstar's Marcelo Claure.
T-Mobile & Sprint
However, regulatory concerns have haunted the possibility of a deal since the beginning. Supporting the idea that regulation caused the fallout, CNBC’s David Faber tweeted: “I can confirm $S has told $TMUS it is no longer seeking a deal and will name a new ceo tomorrow. Regulatory impediments too big.”
Bloomberg reports talks fell apart over disagreements on financing structure and date for a deal.
T-Mobile & Iliad
Last week, a rumor broke that the French telecommunications company, Iliad, was interested in purchasing T-Mobile for $15 billion. According to Reuters, financing is already in place.
Many speculated that a deal with Iliad would make more sense than a merger with Sprint, as the companies would have fewer regulatory hurdles to cross. Sprint shares sold off sharply on the initial Iliad rumor, indicating the degree to which investors thought a Sprint and T-Mobile merger would be accretive.
T-Mobile CEO John Legere has shown his support with for a merger with either company.
Last Thursday, he commented, “The opportunity for a transaction that brings capital and spectrum would be highly beneficial. The opportunity to bring Sprint and T-Mobile together is one. But there are many different ways to to this and we will consider all of them.”
Shares of T-Mobile were last down 8.6 percent to $31, while Sprint shares sold off 16.2 percent to $6.10.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.