T-Mobile and Sprint won’t be joining forces after all.
The two companies ended a months-long negotiation to merge after failing “to find mutually agreeable terms,” they said in a joint statement released early Sunday. The move marks the second time in three years that Sprint and T-Mobile have called off a deal. Talks for T-Mobile to acquire Sprint previously fell apart in 2014.
Neither company elaborated on why the latest talks broke down. In a statement, Sprint CEO Marcelo Claure said the two telecoms “agreed that it is best to move forward on our own.”
“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination.”
On Twitter, notoriously outspoken T-Mobile CEO John Legere said simply that “any deal… has to be a great value for our customers & shareholders or we won’t do it.”
We have jointly ended talks to consider acquiring Sprint. Any deal for $TMUS has to be a great value for our customers & shareholders or we won’t do it. We’ve been changing this industry for good for the past 5 years and #WeWontStop! https://t.co/hY2JQLh0YP
— John Legere (@JohnLegere) November 4, 2017
Behind the scenes, there were a couple major factors that contributed to the much-hyped deal falling apart, according to The Wall Street Journal. Sprint Chairman and Softbank CEO Masayoshi Son was reportedly reluctant to cede control to Legere and Deutsche Telekom, T-Mobile’s parent.
Also at issue: Sprint’s valuation. T-Mobile executives reportedly began to consider a lower valuation for Sprint, following months of its stock falling.
Finally, and perhaps most critically, “SoftBank started questioning the fundamental logic of the deal,” with Son asking why his company would give up control of Sprint, which he viewed as an increasingly “strategically critical asset” for Softbank.
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