Sprint abandons T-Mobile US bid
06 August 2014 |
Sprint has dropped its bid to acquire T-Mobile US, following unwavering resistance from US regulators.
Masayoshi Son, founder of Sprint’s parent company, SoftBank, had been negotiating with US regulators who are concerned that the acquisition will be detrimental to competition in the country, and has since confirmed that Sprint will now be abandoning its bid.
T-Mobile US – the fourth-largest US mobile player – agreed to Sprint’s offer in principal in May 2014, but the deal has been delayed due to regulatory unease that it would reduce the number of major players in the US from four to three.
US regulators have since said that they want to keep the number of major mobile carriers in the US at four.
Son had reportedly seen the acquisition as key to competing with US market leaders AT&T and Verizon, and although Sprint is dropping its offer for now, it has not ruled out future consolidation.
“We didn’t think the opposition would be this strong,” a SoftBank executive told reporters. “The environment will definitely change.”
Sprint’s desertion of the T-Mobile US deal paves the way for French operator Iliad, which made a shock bid for the company late last week.
However, although Iliad’s bid comes with less regulatory concern, it was considerably lower than Sprint’s, and earlier this week Deutsche Telekom, owner of T-Mobile US, doubted its credibility.
Following failed negotiations, Sprint has also reshuffled its management board with the appointment of Marcelo Claure, founder at Brightstar, as CEO.
Claure will replace Dan Hesse, who has been CEO at Sprint since 2007, and was blamed for a loss in subscribers following a disruptive overhaul of Sprint’s network infrastructure, which led to a number of cell site black-outs.
The news has not been publicly announced by any company and SoftBank’s shares fell nearly 5% in Wednesday morning trade in Tokyo.