June 20, 2014

AT&T CEO predicts failure for Sprint/T-Mobile merger

Earlier this month, we reported on a proposed merger between Sprint and T-Mobile that would have a price tag of $32 billion. U.S. regulators are expected to scrutinize any potential deal that involved the third- and fourth-largest wireless carriers because of a concern about less competition. However, executives from SoftBank, Sprint's owner, have promised to start a price war if the merger takes place.

The merger hasn't even been officially proposed yet and already there are some predicting doom and gloom. Though the source has good reason to feel this way.

According to an article from the National Journal, AT&T Chairman and CEO Randall Stephenson and Carlyle Group CEO David Rubenstein took part in a Business Roundtable event earlier this week. During the conversation, they spoke about the merger and Stephenson brought first hand knowledge.

Back in 2011, AT&T and T-Mobile had a similar proposal on the table for $39 billion. However regulators did not approve the merger. The reasoning was simple—it would decrease competition.

"There were not other major issues. That was the issue, and that's what they came after," Stephenson said. "As you think about Sprint and T-Mobile combining, I struggle to see how that is not four going to three."

Stephenson did add, however, that he thought the AT&T version should have been approved, and so should this one.

Business mergers of any size have a number of challenges. This is why it is important to have a sound strategy. Consulting with an M&A advisor can give a company the edge it needs to make sure a deal is successful.