Two of America’s largest cellphone operators, T-Mobile and Sprint, are closing deals that have been underway for weeks for a possible merger, The Wall Street Journal said on Saturday.
T-Mobile, a subsidiary of German group Deutsche Telekom, and Sprint, controlled by the Japanese group SoftBank, are the third and fourth companies in the sector behind Verizon and AT & T. The new company that would emerge from the union would have more than 100 million customers.
Directors of Sprint and Deutsche Telekom met in Tokyo this weekend to discuss the merger but failed to reach an agreement and decided to terminate the deal.
John Legere, president and chief executive officer of T-Mobile in the United States, wrote on Twitter that the companies jointly finalized talks to discuss the purchase of Sprint.
“The prospect of joining Sprint was attractive for a variety of reasons, including the potential to create significant benefits for customers and shareholder value,” the executive said in a statement.
“However, it has always been clear that an agreement should result in a higher long-term value for T-Mobile shareholders compared to our outstanding stand-alone income and our track record,” added Legere in the note.
Sprint chief executive Marcelo Claure acknowledged that the benefits would have helped the deal give Deutsche Telekom control of the new company, according to The Wall Street Journal. However, the chief executive of SoftBank, Masayoshi Son, did not agree to relinquish such control.
Instead of pushing ahead with the merger, SoftBank now plans to buy more shares of Sprint in the open market – the company already has 80% – but staying below 85%, which would trigger a takeover bid, according to the Journal “.
Sprint and T-Mobile had already evaluated a merger in 2014, a negotiation that also has not advanced. In 2011, US officials felt it was best for the industry that there were four carriers in the country instead of three.