Deutsche Telekom reportedly wants to renegotiate price of T-Mobile-Sprint merger

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T-Mobile and Sprint won in the courtroom this week when a judge rejected a state lawsuit that sought to block the carriers’ merger, but their deal isn’t quite done yet. A new report says that before the merger happens, Deutsche Telekom wants to renegotiate the terms of the deal.

It’s said that T-Mobile parent company Deutsche Telekom wants a lower price for the deal because Sprint’s shares have been trading below the level they were at when the deal was first agreed upon in 2018. That’s according to Bloomberg sources who say that the renegotiation talks will likely start soon.

When T-Mobile and Sprint first announced their merger deal in April 2018, the deal was worth $26.5 billion. That merger agreement lapsed on November 1st, though. There have been talks about a new deal that T-Mobile CEO John Legere has described as “not hostile,” but no other details about the negotiations have been revealed.

It’ll be interesting to see where the price for the merger ends up after the renegotiation talks. Sprint’s churn has risen and average revenue per user has fallen since the original merger agreement was announced, but Sprint also has mid-band spectrum that T-Mobile wants for its 5G network, so each side will have some leverage in the talks.

T-Mobile said this week that it anticipates the merger to close as early as April 1, 2020. While a judge ruled in favor of T-Mobile and Sprint in a court case this week, the states that sued to block the merger could appeal that decision. The merger is also still being reviewed by the California Public Utilities Commission and the deal is subject to a Tunney Act review for any possible antitrust concerns.

Source: Bloomberg

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  • Menobastian

    My reaction exactly

  • justanormalguy13

    I swear, this gets messed up after all we’ve gone through, I’ll take off my belt T-Mobile!

    • dcmanryan

      You can’t blame T-Mobile. The original deal included Boost Mobile and Sprint’s stock was valued much higher. I’d renegotiate too if I was in their shoes.

  • riverhorse

    I bet this is also about some obscure detail re what’s given to other entities based on final price Sprint performance.
    ¿Why not keep more money? 5G expanded national deployments burn a lot of money.

    • marque2

      They aren’t really spending money. It is a stock swap. What will happen is that TMobile shareholders will end up owning a slightly higher percentage of the joint company. It isn’t a cash buyout so there is no $26 billion sitting anywhere waiting to be handed over to someone.

      • riverhorse

        You’re right. I meant 5G hardware labor + maybe being able to divest less to Dish n others.

  • CarlKL

    Fair enough.. Sprint stock has been dropping a bit for a while now since they announced the proposed merger 2 years ago. OTOH, the news of the merger probably accelerated the decline so a compromise regarding stock exchange price should be reached.

  • Shaun Michalak

    My take.. The original buyout price is 26.5 billion.. “Sprint puts a value of $41.5 billion on its licensed spectrum holdings”.. They are going to sell the Prepaid brands, and the tiny bit of 800mhz for 5 billion.. So that brings their total buyout price to about 21 billion, plus they get tons of extra Sprint Postpaid customers for more income.. It seems to me the value is still there, and while I can not condemn them for trying to get a lower price, at the same time, it seems that sometimes, it is better to just let things go as they are, and not stir up unnecessary problems.. I am just hoping that this decision to renegotiate does not end up with adverse effects..

    • CarlKL

      renegotiations are standard practice -and expected- in big acquisitions/mergers that take long time to clear. Stockholders won’t “just let go” if it means loosing billions of dollars.

      • Joe

        Exactly, we are not talking chump change here we are talking billions.

        • marque2

          It is somewhat fake money though because it is a stock swap. They could offer a trillion dollars for Sprint and it wouldn’t hurt operations. It would just be that TMobile shareholders would end up with less overall value in the company.

        • Joe

          You do realize if they would do what you said theoretically they would then lose market cap shareholders would dump the company there credit worthiness would drop and they would not be able to get loans. It is not fake money it is just not cash money.

        • marque2

          No it is just paper money. And yes I engaged in hyperbole – but the if TMobile pays a billion too much for Sprint in won’t get sucked into a black hole per your own personal hysteria.

          Unless it is extreme it is really fake money. It is more about Deutche Telecom retaining
          a few percent more ownership of the joint company than anything else. It won’t affect any credit ratings at all.

  • Jay Trainer

    Complete the deal on April Fools’ Day? Oh boy. =)

  • Harry B. Furr

    when is 5G coming out? soon….?

    • marque2

      It came out Dec 9 2019.