T-Mobile and Dish Network are in merger discussions according to sources familiar with the matter, reported the Wall Street Journal.
If the merger would push through, it would signal the acceleration of consolidations of players in the communications and media industries in the United States.
T-Mobile and Dish Network are reportedly close to hammering out the final details of the structure of the resulting company of the merger. Charlie Ergen, the CEO of Dish Network, will become the chairman, while John Legere, the CEO of T-Mobile, will retain his position as the CEO of the new company.
Remaining unresolved and the current focus of the ongoing discussions are the purchase price and the combination of cash and shares which will be used to pay for the merger. According to one of the sources, the discussions are still in the "formative" phase, which means that there I still the possibility that a merger agreement between T-Mobile and Dish Network will ultimately not come to fruition.
However, if the merger is completed, it would become the latest in a series of business combinations that are worth billions of dollars between companies operating within the communications and media industries, both of which are facing stiff competition from Internet-based rival services.
For example, AT&T, a rival of T-Mobile in the communications industry, is close to completing the acquisition of DirecTV, a rival of Dish Network, for the sum of $49 billion. This merger will create the biggest pay TV company in the United States.
In addition, Charter Communications has recently unveiled deals worth a total of about $67 billion which would combine Time Warner Cable and Bright House Networks to form the second biggest cable company in the country.
The merger deal between T-Mobile and Dish Network would command such massive amounts, with T-Mobile's market capitalization currently at $31 billion while that of Dish Network is a little larger at $33 billion.
The move will be beneficial for both companies, as it would shore up certain strategic weaknesses that each company currently has.
T-Mobile is currently the fourth biggest wireless carrier in the country, while Dish Network is the second biggest satellite TV company in the United States.
