This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Sprint and T-Mobile Merger? You Vote

Updated from 4:43 p.m. ET with closing stock prices.

NEW YORK (TheStreet) -- Sprint (S) is reportedly preparing a bid for competitor T-Mobile (TMUS - Get Report), in a possible merger of the number three and four wireless carriers by market share in the U.S.

According to the Wall Street Journal, Sprint is preparing a takeover that could be worth in excess of $20 billion, however the telecom hasn't yet decided whether it will unveil a formal offer. A key issue in any prospective deal would be the blessing of the Justice Department, which rejected AT&T's (T) $39 billion takeover attempt of T-Mobile in 2011.

A key calculus in any deal would be Sprint's perception that regulators would tolerate a merger between two of the four nationwide wireless carriers. The DoJ and Federal Communications Commission have blessed smaller-sized takeovers such as AT&T's acquisition of Leap Wireless, Sprint's takeover of Clearwire and T-Mobile's merger with MetroPCS in 2013.

The Justice Department also recently allowed for the merger of U.S. Airways and American Airlines, in a deal that will create the world's largest airline and put a vast majority of the airline industry in the hands of four players.

Sprint, itself, was subject to a takeover battle in 2013 as DISH Network (DISH) sought to outbid SoftBank, a Japanese telecom that now holds majority control of the carrier.

Since then, a combination of Sprint and T-Mobile has been an oft-discussed merger in the consolidating telecom sector. Proxy filings in Sprint's takeover by SoftBank also indicated that the company had been close to a merger agreement with T-Mobile.

John Paulson of hedge fund Paulson & Co., a vocal investor in the telecommunications sector, has also floated the idea of a merger with Sprint and T-Mobile. Paulson currently is a large investor in both firms and has played an important role in many of the sector's biggest deals.

Sprint declined to comment for this story.

A Sprint and T-Mobile merger isn't the only transformational deal currently being speculated in telecom and communications markets. DISH Network has entertained the idea of a merger with DirecTV (DTV) following its failed bid for Sprint. Meanwhile, Charter Communications (CHTR) is reportedly close to submitting a takeover offer for Time Warner Cable (TWC). Comcast (CMCSA) is also a rumored bidder for some or all of Time Warner Cable.

A takeover of T-Mobile, DirecTV or Time Warner Cable would be one of the biggest mergers in recent years, and likely a culmination of consolidation throughout wireless and wireline communications networks in the U.S.

T-Mobile shares gained over 8% in Friday trading on the WSJ's report, while Sprint shares gained over 3%, closing at $8.43 a share.

What do you think is a more likely deal in 2014?

-- Written by Antoine Gara in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
S $5.09 -0.59%
TMUS $32.96 -0.21%
AAPL $129.09 0.49%
FB $79.75 0.99%
GOOG $571.34 2.32%

Markets

DOW 18,288.63 +155.93 0.86%
S&P 500 2,117.39 +12.89 0.61%
NASDAQ 5,008.0960 +44.5690 0.90%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs