June 5 - Sprint has agreed to pay $40 a share to buy T-Mobile US, according to sources, but some analysts say that combination would have slim chances of getting regulatory approval. Fred Katayama reports.
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Sprint is betting it can win over skeptical regulators. A source says it has agreed to pay $40 a share for T-Mobile US. Such a deal valued at more than $32 billion would combine the U.S.' third and fourth largest carriers. The source says more details need to be worked out.
But the deal could face huge regulatory hurdles. T-Mobile has been to the altar before. Regulators refused to bless its marriage to AT&T back in 2011, concerned that such a merger would raise prices for consumers. AT&T and Verizon Wireless dominate the U.S. market, and a Sprint/T-Mobile deal would leave the U.S. with just three major wireless carriers.
But the wider telecom arena is consolidating. Comcast is trying to merge with Time Warner Cable; ditto AT&T with DirecTV. And that, a source says, could leave Sprint an also-ran if it doesn't take action.
RBC analyst Jonathan Atkin says a Sprint/T-Mobile combination would have "narrow" chances of getting regulatory approval, noting that T-Mobile has been a "disruptive competitor and driven consumer-friendly rate reductions throughout the sector."
He says don't be surprised if satellite service provider Dish Network were to bid for T-Mobile, adding that it would have a better shot at getting approved.