Sprint is aiming to acquire T-Mobile; however, that might not happen as the carrier may face opposition from Justice Department's antitrust officials, according to a source with knowledge of the matter.
Recently, the Justice Department met with Sprint board members Masayoshi Son and Dan Hesse. The officials stated that they would view Sprint's acquisition of T-Mobile with skepticism.
The U.S. anti-trust regulators believe the top four carriers in the U.S. are vital to maintain a competitive market. Furthermore, they added that a deal between Sprint and T-Mobile could bring up regulatory difficulties.
Sprint argues that a merger with T-Mobile would make it easier to compete with both Verizon and AT&T, the two top carriers in the United States. However, the Justice Department was not convinced, which makes us wonder if Sprint will ever be able to go through with the deal.
At the moment, SoftBank Corp, the majority shareholder in Sprint, is in talks with Deutsche Telekom AG, the owner of T-Mobile. The two are attempting to overcome whatever obstacles that lie ahead that could hinder the merger. However, any agreement on a deal could take months to complete.
The bankers are backing Sprint but there is also the possibility of the deal falling apart. If the deal falls through, Sprint may have to pay T-Mobile some fees. However, if th deal goes through, the question remains as to whether T-Mobile will continue to operate as a separate entity or whether it will be completely merged with Sprint.
If the deal goes sour, it wouldn't be the first time a carrier has failed to acquire T-Mobile. More than 2 years ago, AT&T attempted to acquire T-Mobile, but failed in its bid. This was mainly due to Sprint opposing the deal, citing competitive problems.
