Sprint to call off merger with T-Mobile, clash over control of the combined carrier to blame

Rumors of newly rekindled talks about a merger between Sprint and T-Mobile started popping up in September. Then at the beginning of this month it was claimed that the two companies were actually in the final stages of negotiation, so at this point we were expecting an official announcement on the matter.

That, however, isn’t going to happen, a Nikkei exclusive report says. Sprint owner SoftBank has allegedly decided to call off the merger. It will approach T-Mobile owner Deutsche Telekom as soon as tomorrow to let it know.

Telekom and SoftBank had apparently reached “a broad agreement” to integrate T-Mobile and Sprint, the third and fourth largest carriers in the US, respectively. All that was left to do was iron out such details as the ownership ratio. And that’s exactly where things went wrong.

Telekom has insisted on having a controlling stake in the new entity formed, and “some at SoftBank were initially amenable as long as the Japanese company retained some influence”. But SoftBank’s board discussed this issue specifically at a meeting on Friday, and in the end decided that the company would not agree to give up control. Following this, today SoftBank made up its mind about calling off the talks.

So there you have it: it looks like everything was going very well for this deal, but unfortunately both parent companies of the merging carriers wanted to retain control of the new corporation that would be formed as a result. And so, once again, the existence of a combined T-Mobile + Sprint entity has been thwarted. Previously, SoftBank wanted to buy T-Mobile from Deutsche Telekom in 2014, but it gave up amid opposition from regulatory authorities.