Japan’s Softbank and Deutsche Telekom (DT) of Germany have reached a basic agreement for a merger between their US subsidiaries, Sprint Corp and T-Mobile US, Japanese business daily Nikkei has reported. The Japanese carrier plans to buy more than 50% of T-Mobile’s shares through Sprint; DT currently owns a 74.29% interest in the US cellco.
Softbank will pay cash and use stock swaps to cover the estimated purchase cost of more than JPY1.7 trillion (USD16.7 million). Meanwhile, eight financial institutions, including Japan’s top three megabanks Mizuho, Mitsubishi UFJ and Sumitomo Mitsui, will provide a credit line of around JPY4 trillion for the deal, the report notes.
According to TeleGeography’s GlobalComms Database, as at 31 March 2014 Sprint claimed a 17.0% share of the wireless market, compared to T-Mobile’s 14.4% share of the spoils. If combined, the enlarged operator would hold a 31.4% market share, placing it narrowly behind second-placed AT&T Mobility (31.5%) and market leader Verizon Wireless (34.9%).