Sprint Corp. (NYSE:S) is reported to have started preliminary conversations to merge with T-Mobile US Inc. (NASDAQ: TMUS), the latest attempt to consolidate in a market watched closely by U.S. regulators.
Sources say executives of both SoftBank Group Corp., Sprint’s largest shareholder, and Sprint itself have had informal – and private -- contact with T-Mobile owner Deutsche Telekom AG about a transaction.
Merger talks in the wireless industry had been on hold for almost a year because of a government spectrum auction that required participants to avoid negotiating deals with each other until April 27.
A Sprint merger with T-Mobile is said to come loaded with regulatory risk and won’t be easy to structure. Sprint had been interested in acquiring T-Mobile in 2014, though the deal fell apart on regulatory concerns.
Since then, T-Mobile’s market valuation has soared to $55 billion -- about $23 billion more than Sprint’s. A merger proposal would be a major test of the Trump administration’s attitudes to telecommunications mergers at a time when it’s already weighing AT&T Inc.’s (NYSE: T) $85.4-billion purchase of Time Warner Inc. (NYSE: TMX)
In addition to T-Mobile, Sprint executives have also expressed the view that the company could receive overtures from cable companies, such as Comcast Corp., Charter Communications Inc. and Altice NV, which have expressed an interest in the U.S. wireless market.
On Friday, just as traders were checking out for lunch, Sprint shares gained just more than seven cents to $7.94, within a 52-week trading range of $3.39 to $9.65.
