Sprint, T-Mobile Merger Talks Edge Closer but Still Drag On

By Ryan Knutson Features Dow Jones Newswires

Sprint Corp. and T-Mobile US Inc. both took the unusual step of canceling their earnings calls this week to avoid questions about their potential merger, a move seen by many as a sign the companies are close to announcing an agreement.

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Yet despite months of talks, there is still no final deal in hand, according to people familiar with the matter. An agreement to combine the nation's third and fourth largest cellular carriers by subscribers could be announced within the next few weeks, the people said, though it could also still fall apart.

Broad outlines of the deal are largely settled, the people said: The transaction will be all-stock, and T-Mobile parent company Deutsche Telekom AG will have control over the combined company. T-Mobile Chief Executive John Legere will run the combined company. Sprint Chairman Masayoshi Son will be co-chairman of the board along with Tim Höttges, the CEO of Deutsche Telekom.

In an unusual twist, the deal will have no cash breakup fee, the people said. Instead, if the deal is blocked by regulators, T-Mobile would have to give Sprint an attractive roaming deal so Sprint's customers can connect to T-Mobile's towers where Sprint doesn't have coverage, the people said.

The companies are now working on business and network integration plans and preparing arguments for what is certain to be intense antitrust scrutiny in Washington. "Haggling over an agreement is over," said one person close to the deal.

Drew FitzGerald and Dana Mattioli contributed to this article

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Write to Ryan Knutson at ryan.knutson@wsj.com

(END) Dow Jones Newswires

October 25, 2017 11:19 ET (15:19 GMT)