Banks Are Getting Interested in Sprint and T-Mobile

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It was reported on Thursday that T-Mobile US’s (NYSE:TMUS) majority shareholder Deutsche Telekom had moved its U.S. assets possibly in preparation for a sale, and now sources familiar with the matter who spoke to the Wall Street Journal have said that Sprint (NYSE:S) has been approached by two major U.S. banks in regards to financing a potential acquisition of T-Mobile.

According to the Journal’s sources, multiple banks have told Sprint that it would be possible to finance a takeover of T-Mobile, which has increased Sprint’s confidence that a deal is possible. The people said that a bid would likely be around $50 billion, with $31 billion going towards paying for T-Mobile and $20 billion for refinancing T-Mobile’s existing debt. All these signs point to a deal between Sprint and T-Mobile that will combine the nation’s third and fourth-largest wireless carriers into a better competitor against AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ), which combined account for two thirds of the wireless subscribers in the U.S. T-Mobile executive Braxton Carter has criticized the current U.S. wireless market as being a duopoly between AT&T and Verizon.

Japanese telecom company SoftBank (SFTBY.PK) purchased a majority stake in Sprint last year, and at the time, SoftBank CEO Masayoshi Son said that his goal was to transform Sprint into a more able competitor against AT&T and Verizon, eventually growing SoftBank into the largest telecom company in the world. A purchase of T-Mobile — which has been showing good financial results by boosting its subscriber numbers and creating innovative new options for its customers through its “un-carrier” business model — would be a big step in the right direction for Son.

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