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Report: Sprint, T-Mobile May Consider Concessions To Gain Merger Approval

Report: Sprint, T-Mobile May Consider Concessions To Gain Merger Approval

T-Mobile Us Inc (NASDAQ: TMUS)'s proposed $26.5-billion acquisition of rival telecom company Sprint Corp (NYSE: S) has yet to receive approval and the two companies are now considering potential concessions to please regulatory authorities, Bloomberg reported.

What Happened

T-Mobile and Sprint are considering several moves to ease regulatory concerns, including the separation or sale of their prepaid businesses, sources close to the matter told Bloomberg. Other options which are less attractive, the source said, include selling airwave licenses and establishing a new carrier through a network-leasing arrangement.

T-Mobile and Sprint's openness to make concessions marks a shift from their "bigger-is-better approach." The companies argued a merger would create a new entity that is able to better compete against industry giants like Verizon Communications Inc. (NYSE: VZ)

Why It's Important

T-Mobile and Sprint are likely anticipating a challenge from the U.S. Justice Department's antitrust division and the Federal Communications Commission. Bloomberg said an offer to divest assets is a common concession for companies seeking merger approval to resolve any concerns.

The concession options T-Mobile and Sprint are considering may not be sufficient to please the regulatory bodies although it may help advance discussions.

Sprint closed Monday's session at $6.02 per share, while T-Mobile closed at $73.42.

Related Links:

Raymond James Downgrades Sprint, Cites T-Mobile Uncertainty

Guggenheim Underwhelmed By T-Mobile's New TV Service Plan

Photo credit: Mike Mozart, Flickr


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