Sprint & T-Mobile Agree To Merger, Revisiting Deal Scrapped During Obama Era In Fear Of Regulatory Challenges

Sprint and T-Mobile announced that they have agreed to a merger. The chances of pushing the merger through are better under the Trump administration than they were under Obama.

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Sprint and T-Mobile announced that they have agreed to a merger. The chances of pushing the merger through are better under the Trump administration than they were under Obama.

Early Sunday morning, The CEO of T-Mobile, John Legere, announced a planned merger between the third and fourth largest wireless U.S. providers in a market, T-Mobile, and Sprint. In a Tweet announcing the agreed merger, Legere stated that he is “excited to announce” that T-Mobile and Sprint have finally decided to merge and, in doing so, form a new company. This company is expected to be “a larger, stronger competitor that will be a force for positive change for all US consumers and businesses.”

At their last closing price, T-Mobile was valued at $55 billion and Sprint came in at $26 billion. According to a statement released to the press, the combined company, which will take on the name of T-Mobile, has an implied value of approximately $146 billion.

CNN Money reported that a merger between T-Mobile and Sprint was first discussed back in 2014. The two companies remained separate at that time due to the regulatory challenges that they faced during the Obama administration. There is a higher probability of a successful merger under the Trump administration.

Before their initial attempts at a merger with Sprint in 2014, T-Mobile’s shares sky-rocketed when they announced a potential $15 billion takeover of a French company known as Iliad.

CNN Money reports that in their takeover of a foreign company, T-Mobile would be able to bypass the antitrust and political challenges faced during the Obama era. Since the company had no footprint in the United States, there were far less antitrust restrictions placed on Iliad than Sprint.

Under President Obama, a 2014 deal between Sprint and T-Mobile would have drawn an extensive review from elected officials who can end merger agreements. This regulatory challenge was explained at length by Sprint in their decision to end merger discussions in 2014. The Trump administration has lifted many of the restrictions companies once faced in previous years, making a merger between Sprint and T-Mobile easier.

CNBC points out that the announcement of an agreement between T-Mobile and Sprint isn’t concrete proof that the merger will actually take place. Joining the third and fourth largest wireless providers in the United States will take some time. There are only four wireless participants currently in the market, Verizon, AT&T, T-Mobile, and Sprint. Even with fewer regulations under the Trump administrations, the merger could be blocked based on the anti-competitive guidelines.