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November 5, 2017 10:00 pm

Failure of Sprint/T-Mobile Merger Means a Missed Chance To Save $30B

UPDATE (11/5/17): Sprint and T-Mobile confirmed Saturday that they've ended their merger talks, saying they were "unable to find mutually agreeable terms." The Kansas City Star reports that the failure "means shareholders of the two companies gave up $30 billion or more in cost savings that their managements had expected a merger to generate. "One combined wireless company would have needed to invest less in its network than the two competing companies spend separately... Absent a merger, Sprint now faces a highly competitive marketplace as the smallest national player and with a more aggressive rival in T-Mobile." Several news outlets had already reported on Monday that Japan's conglomerate SoftBank, which owns Sprint, has pulled the plug on a proposed merger between the two carriers. From a report: SoftBank will reportedly propose ending merger talks with T-Mobile parent company Deutsche Telekom as soon as Tuesday, October 31st. That's according to Nikkei, which says that SoftBank wants to end merger talks due to "a failure to agree on ownership of the combined entity." It's said that Deutsche Telekom insisted on a controlling stake of the combined T-Mobile-Sprint, and that some people at SoftBank were okay with that as long as SoftBank had some sort of influence. However, SoftBank's board recently decided that it wouldn't give up control, and today it decided that it wants to call off the merger talks. Last Monday Sprint and T-Mobile shares both fell immediately following the media reports.

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