June 6, 2014

Sprint and T-Mobile reportedly in talks of merger

As we have discussed previously on this blog, when major players in an industry come together for a merger or an acquisition, it can raise concerns over whether or not the deal will be beneficial to the public.

It's up to regulators to approve these types of deals before they go through. Recent notable examples of deals subject to regulatory scrutiny are the acquisition deal between AT&T and DirecTV, and the deal between Comcast and Time Warner Cable. It is up to the Federal Trade Commission and the U.S. Justice Department to review mergers and acquisitions that may be anticompetitive.

It was recently reported that two mobile networks have agreed on a merger. According to Reuters, Sprint will be purchasing T-Mobile. The report comes from "a person familiar with the matter." It was said that the deal may be for $32 billion. If the deal goes through, "the third and fourth-biggest U.S. mobile network operators" would become one, according to the article. According to a New York Times article, the deal could be officially announced over the summer.  

Just as AT&T, DirecTV, Comcast and Time Warner Cable are subject to being examined by federal regulators, Sprint and T-Mobile will be too. If any of these deals raise concerns over antitrust issues, they will be subject to further scrutiny. One of the purposes of reviewing these mergers is to ensure that a deal won't result in one company coming to dominate the market. 

When planning a merger, there are many factors that come into play. It is important for companies to have a sound strategy to ensure the merger goes as smoothly as possible. Consulting with an M&A advisor can give a company the edge it needs to make sure a deal is successful.