Published: Wed, November 01, 2017
Tech | By Dwayne Harmon

Deutsche Telekom, SoftBank Strikes Wall in Sprint: T-Mobile Talks

On Friday, in a board meeting with the Soft Bank of Japan, various directors conveyed doubts on giving up control over Sprint in any of the deal, as per sources.

SoftBank Group plans to halt talks to merge USA unit Sprint Corp. with T-Mobile US because of disagreements over ownership of the combined company, Nikkei reported, without saying where it got the information.

The pair had reached a broad agreement to integrate T-Mobile and Sprint - the third- and fourth-largest carriers in the US - and were ironing out such details as the ownership ratio.

The Nikkei Shimbun on Monday reported that SoftBank would propose ending the talks as early as yesterday, citing the concerns about control of the combined entity.

Shares of Verizon Communications Inc. and AT&T Inc., the two biggest US carriers, slipped Monday, as investors were hopeful the merger would have reduced competitive pressures. But Sprint has struggled to differentiate its offerings and has trailed competitors in network quality tests - a situation resulting, some say, from an inability or unwillingness to make network investments that keep pace with the rest of the market. Bloomberg reported that deal talks have "hit a serious snag".

In the past three days, the companies have been unable to get past differences over valuation, according to a person close to T-Mobile parent Deutsche Telekom AG, who asked not to be identified discussing private information. Sprint, T-Mobile and SoftBank did not respond to questions from The Associated Press. Tokyo-based SoftBank had been willing to accept a stock-for-stock merger that valued Sprint at our near its market price, with no premium, people familiar with the matter said last month.

A decision to walk away from the T-Mobile deal would echo the last time the two companies explored a merger, in 2014.

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