Sprint And T- Mobile Merger Talks Begin – CWEB.com
By: Leslie Cohen
Sprint Corp. (S )and T-Mobile US Inc. (TMUS) have rekindled merger talks. After four years, the two companies that have been fierce rivals are exploring a combination for the third time in four years.
Shares of Sprint Corp. (S) , +18.00% spiked higher in midday trade, Tuesday 4/10/2018. Last time, merger talks were left in disarray after the companies could not agree on who would take control over the combined entity. Japan’s Softbank Corp. owns about 85 percent of Sprint and T-Mobile (TMUS) is controlled by Germany’s Deutsche Telekom AG.
Looking to expand into the 5G wireless technology, a merger between Sprint (S) at T- Mobile (TMUS) can give it an edge to compete and serve 127 million customers if combined. Sprint stated back in March that $6 billion annually, over the next several fiscal years would need to be spent on upgrades.
While under CEO Marcelo Claure, states Sprints growth has occurred due to massive and heavy discounting. It looks like Sprint just can’t get up to scale without a T- Mobile partnership.
Regulatory- and antitrust hurdles would exist under the current political climate with a Sprint- T- Mobile merger. The merger between AT&T Inc.(T) – and Time Warner Inc. (TWX) – is up against hurdles, and fighting this battle in court.
CWEB Analyst’s have initiated a Hold Rating for Sprint Corp. (S) , and a Price Target of $5.40
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