Sprint Proposes Merger with Charter Communications

By Ryan Knutson and Dana Cimilluca Features Dow Jones Newswires

Sprint Corp. has proposed a merger with Charter Communications Inc. that would create a media and communications giant, upending industries that are already in the throes of dramatic change.

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Since the end of May, Charter and Comcast Corp. had been in exclusive talks with Sprint over possible deals, including one that would allow the cable companies to resell wireless service under their own brands. Though the exclusivity window ended this week, Sprint Chairman Masayoshi Son continues to pursue a much larger deal with Charter, according to people familiar with the matter: a full-blown merger of the two companies.

The complex proposal calls for the creation of a new publicly traded entity that would combine Sprint and Charter and be controlled by Japan's SoftBank Group Corp., the people said. SoftBank, whose chairman is also Mr. Son, already controls Sprint.

It is far from guaranteed that Charter would ultimately agree to such a deal.

Should Mr. Son manage to succeed, the deal would be big: Sprint has a market value of $33 billion and about that much in net debt. Charter has a market value of nearly $100 billion after swallowing Time Warner Cable Inc. last year and more than $60 billion of net debt.

The resale deal the cable companies have been discussing, which could have included an agreement to invest in Sprint's network and possibly buy a stake in the wireless carrier, appears to have taken a back seat to the merger talks. It is still possible, however, that there could be a resale deal with Sprint instead of any full-blown merger.

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Before embarking on the resale talks, Sprint had been discussing a possible merger with rival T-Mobile US Inc., an effort that could now be rekindled alongside the Sprint-Charter talks, the people said. Even if Sprint and Charter did strike a merger or resale deal, it wouldn't preclude a subsequent tie-up between the new group and T-Mobile, one person said.

Write to Ryan Knutson at ryan.knutson@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

July 28, 2017 19:46 ET (23:46 GMT)