Sprint Corporation (NYSE: S) has begun informal merger talks with T-Mobile US (NYSE: TMUS), after a temporary Federal Communications Commission ban on merger negotiations during the recent spectrum auction has been lifted. The FCC imposes strict anti-collusion rules banning discussions between competitors while a spectrum auction is taking place.
Masayoshi Son, CEO of SoftBank, the parent company of Sprint, told shareholders in the company’s recent earnings call T-Mobile would be his “first priority” when considering a Sprint merger.
Although neither Sprint nor T-Mobile are making official statements regarding a possible merger, last January at CES in Las Vegas, T-Mobile CEO John Legere described the merger as “a potential future outcome” due to the likelihood a merger would be approved under President Trump, who has taken a more free market approach, whereas regulators in the previous administration made it clear they would not be as willing to approve such a deal.
Last February, Reuters had reported that SoftBank was already positioning itself to enter into talks with Deutsche Telekom, the parent company of T-Mobile, after the close of the FCC spectrum auction.
Both SoftBank and Deutsche Telekom have seen tremendous growth in the past year. Deutsche Telekom’s stock rose around 3.5% last Friday when rumors of merger talks were first reported.
