BY Fraser Tennant
In a combination set to create thousands of American jobs and boost US economic growth, mobile carrier rivals T-Mobile US and Sprint Corporation have agreed to merge in an all-stock transaction valued at $26bn.
The deal, which follows months of negotiation between T-Mobile's parent, Deutsche Telekom, and Japan's SoftBank, parent of Sprint, is expected to create more competition and unmatched value for customers across the US, with existing T-Mobile and Sprint customers benefiting from increased speeds, coverage and performance.
The combined company will have a market value of $146bn and be named T-Mobile.
Moreover, the new company will have the network capacity to create a nationwide 5G network in the critical first years of the 5G innovation cycle – the years that will determine if US firms lead, as they did in 4G, or follow in the 5G digital economy.
“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation and a second-to-none network experience – and do it all so much faster than either company could on its own,” said John Legere, current president and chief executive of T-Mobile US. “As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.”
Mr Legere will serve as chief executive of the new entity while Marcelo Claure, the current chief executive of Sprint, will serve on the board.
“The combination of these two dynamic companies can only benefit the US consumer," said Mr Claure. “Both Sprint and T-Mobile have similar DNA, and we intend to build the world’s best 5G network that will make the US a hotbed for innovation and redefine the way consumers live and work.”
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close no later than the first half of 2019.
Mr Claure concluded: “I am confident this combination will spur job creation and ensure opportunities as part of a larger, stronger combined organisation. As we do this, we will force our competitors to follow suit, as they always do, which will benefit the entire country.”