| WASHINGTON/NEW YORK, July 29
WASHINGTON/NEW YORK, July 29 The
long-anticipated merger of Sprint Corp and T-Mobile US Inc
is not expected to occur before September, with the
companies continuing due diligence and preparing a detailed case
for a deal before U.S. regulators, according to people familiar
with the matter.
Japan's SoftBank Corp, which controls Sprint, and
T-Mobile owner Deutsche Telekom AG have agreed to
broad terms of a deal, under which Sprint would pay around $40
per share for T-Mobile, valuing the smaller rival at nearly $32
billion, Reuters reported in early June.
Despite agreeing to other key terms such as break-up fees,
the proposed transaction is taking extra time to finalize,
partly because the companies are keen to bulletproof their
arguments for a merger that is sure to face heavy regulatory
scrutiny, two of the people familiar with the matter said on
All the people asked not to be named because the discussions
Representatives for Deutsche Telekom could not be
immediately reached for comment, while representatives for
Sprint, T-Mobile and SoftBank declined to comment.
Analysts see the regulatory challenge as the biggest hurdle
facing the companies since both the U.S. Federal Communications
Commission (FCC) and Department of Justice (DOJ) have expressed
a desire to have at least two more network operators competing
against the market leaders AT&T and Verizon.
SoftBank Chairman Masayoshi Son has argued to U.S.
regulators that a merger would give the companies leverage to
compete against the two dominant rivals. A combined
Sprint-T-Mobile would boast more than 100 million subscribers,
still behind both Verizon and AT&T.
SoftBank is also likely to argue that the huge pending
mergers of Comcast Corp with Time Warner Cable Inc
, and AT&T with DirecTV, would further
marginalize Sprint and T-Mobile.
But top U.S. antitrust and communications enforcers have
already warned that the wireless market is too concentrated. In
2011 the Justice Department stopped a bid by AT&T to buy
Others say recent approval of a merger between US Airways
and American Airlines was a sign regulators could be convinced
of the merits of a deal that reduces the number of competitors
but creates a stronger number three.
(Reporting by Marina Lopes in Washington, Soyoung Kim and Liana
Baker in New York)