Sprint Calls Off T-Mobile Merger, Both Companies Nose Dive

Investors are parting ways with T-Mobile TMUS and Sprint 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 tomorrow.

T-Mobile & Sprint

A Sprint and T-Mobile merger has been rumored for several months. Analysts think the combined company could compete effectively against giants AT&T T and Verizon VZ.

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 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 less regulatory hurdles to cross. Sprint shares sold off sharply on the initial Iliad rumor, indicating the degree to which investors though a Sprint and T-Mobile merger would be accretive.

Looking Forward

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.