What you need to know about T-mobile and Sprint Merger

The long-awaited merger of TMobile (TMUS) and Sprint (S) that has been ongoing for more than two years is closed to happening this year. This latest development was as a result of the court order ruled in favor of the merge on 11th February 2020. Significantly, the merger is going to be the fourth-largest carrier in the united state. Also in the court, there were deliberations on making Dish Network, the fourth national wireless carrier, although this was not finalized. Despite the fact that big technology platforms like Facebook and Google are doing extremely well, this decision is not a surprising one.

In relation to the court decision, Judge Victor Marrero of the United States District Court for the Southern District of New York City said most of the data and experts gathered and presented by the 10 states attorneys fighting against the merge does not have any quality effect and cannot be taken seriously. He also said the decision whether or not T-Mobile and Dish the merge would take place would be taken by him.

The outcome of the court session shows that Judge Marrero sees John Legere and the rest of the T-Mobile executives as very capable. Marrero thinks the record of the two companies is a very good one. Dish Network can be trusted and the merge would turn out great.

However, the judge sees Sprint as a company too flippant and which in his opinion is controlled and run by dummies.

The Move For Renegotiation

T-Mobile looks forward to renegotiating the former price agreed upon two years ago. This came immediately after the merger was approved on Tuesday. One of the major reasons for this is because the share price and performance of Sprint have continued to deteriorate for the past two years.

At the early stage of the quest to merge the two companies, shares in Sprint was trading around 45% discount. But in the current report, even after the company's stock increased by 77%, the discount still remains at 12%. Presently, Sprint stock is below $9 per share. This is one of the major reasons T-Mobile wants to renegotiate. 

Notwithstanding, renegotiating the term would not only complicate the deal's timeline but also lead to misunderstanding between the two companies. While many people believe T-Mobile has the option to walk away from the deal, for it to emerge successful in the looming 5G network, it would need the Sprint’s large stockpile of the spectrum—radio frequencies that wireless signals travel over.

Aside from this, there are more significant reasons why the two companies would want to continue with the merge. Part of this is, finalizing the merge would help T-Mobile reduce its reliance on Europe. In the same vein, for SoftBank’s Masayoshi Son, finalizing the merge would help him concentrate on improving the dwindling performance of his $100 billion Vision Fund.