Sprint and T-Mobile Merger Faces Hurdles

A merger between Sprint and T-Mobile /4/be in the cards yet it faces various hurdles. The biggest obstacle to a takeover comes from the US Department of Justice which sees the issue of monopoly in this deal.

While Sprint is the third largest mobile phone carrier in the United States, T-Mobile comes in at the fourth spot. But now that Sprint has its eyes set on T-Mobile (which was its major rival before this marriage of convenience) some third parties are getting worried. Cutthroat competition is a part of the way the free enterprise market works. 

This means by its very nature that monopoly is anathema. But with this multibillion dollar acquisition which is planned to occur soon, such likelihood is inevitable. And the Department of Justice has raised its hackles over the urge to merge that is about to be made by Sprint.   

The person who owns a majority stake in Sprint, Masayoshi Son is a headstrong man. He is not one to back out of a melding of two companies in order to beat the rest.  Despite opposition from the DOJ, Masayoshi Son remains unconvinced and is set in his ways. Some sort of agreement, that puts checks and balances on the big business, will have to be hammered out. Other than that, Sprint has been hankering for this takeover for awhile. 

AT&T nearly acquired T-Mobile a year or two ago. But that deal wasn’t finalized and fell apart. Now that Sprint finally has its chance, it is not about to let go so easily. T-Mobile has large shares of it which are owned by Deutsche Telekom. It will be a valuable asset in Sprint’s repertoire.    

Source: WSJ