Sprint is reportedly pulling out of T-Mobile merger talks

Reuters

According to the report, the giant Japanese technology company ended its effort to become a major player in the USA wireless market after Sprint and T-Mobile were unable to agree on how ownership of the new company would be structured. Sprint shares fell 9 percent following a report from the Nikkei that Softbank might be backing off from a potential agreement; T-Mobile shares fell 5 percent.

Nikkei Asian review was among the first to report that Sprint parent SoftBank plans to end talks with T-Mobile parent Deutsche Telekom, "dashing the Japanese technology giant's hopes of reshaping the American wireless business". WSJ claims that SoftBank's board met in Japan over the weekend, and expressed concern about giving up control of Sprint.

The German parent had insisted on a controlling stake, according to a source familiar with the situation.

Investors have cheered on a combination of T-Mobile, the third-largest USA wireless carrier, with No. 4 Sprint as a way to cut costs and forge a bigger competitor to take on AT&T and Verizon Communications. Some at SoftBank were initially amenable as long as the Japanese company retained some influence.

Shares of both companies took a major hit in Wall Street trading as the news broke. Instead of the merger, the company would make a "significant investment in its network". Representatives from SoftBank and T-Mobile could not be immediately reached for comment.

A deal between Overland Park, Kansas-based Sprint and Bellevue, Washington-based T-Mobile would be certain to attract heavy scrutiny from regulators, since it would reduce the four largest carriers in the country to three.

SoftBank Group, which owns Sprint, has called off a planned all-stock deal that would have merged the two wireless companies.

Earlier this year, Sprint held acquisition conversations with Comcast and Charter.

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