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Sprint, T-Mobile, & SoftBank Shares Tumble As Merger Deal Collapses

The long-awaited merger between Sprint S and T-Mobile TMUS seems to have fallen apart for good over the weekend, and shares of all parties involved—including Sprint parent SoftBank SFTBY—are falling on Monday morning.

T-Mobile and Sprint, the third and fourth-largest U.S. mobile carriers, have been deeply embedded in merger talks for months, but ultimately the companies decided to maintain the four-horse race that is the domestic wireless market.

“The companies were unable to find mutually agreeable terms,” said a joint press release Saturday.

Shares of Sprint were down more than 13% in morning trading Monday, while T-Mobile slipped nearly 5.5%. T-Mobile parent Deutsche Telekom DTEGY dropped about 3.75%, and Sprint owner SoftBank fell about 5.3%.

SoftBank has considered a deal with T-Mobile for years, but it looks like the Japanese company’s concerns about maintaining ownership might have led to the collapse of the merger. In response, the telecommunications behemoth will be upping its stake in Sprint to 85% from 82%.

“We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth,” said Sprint CEO and SoftBank board member Marcelo Claure. “As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries.”

Sprint, in an immediate move to its backup plan, announced a new deal with U.S. cable operator Altice USA ATUS. Altice will sell mobile service plans on Sprint’s network, adding its name to the list of cable providers entering the wireless network as the industry continues to shift.

Altice is currently the fourth-largest U.S. cable operator. The deal will also allow Sprint to use Altice’s cable infrastructure to transmit cellular data, with a specific emphasis on the company’s development of next-generation 5G networks.

Nevertheless, Sprint’s plunge on Monday morning dragged shares of the struggling carrier to a new 52-week low.

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Sprint Corporation (S): Free Stock Analysis Report
Deutsche Telekom AG (DTEGY): Free Stock Analysis Report
T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
Softbank Corp. (SFTBY): Free Stock Analysis Report
Altice USA, Inc. (ATUS): Free Stock Analysis Report
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