For T-Mobile, to Divest or Not to Divest

June 20th, 2019 by · 2 Comments

This past week a new bidder emerged for the assets T-Mobile and Sprint might have to divest to get their deal past regulators. Dish and its billionaire CEO Charlie Ergen have reportedly been working on a $6B deal to carve out enough assets for a new #4.

The previous speculation had Amazon possibly doing that, and there were also rumors of some private equity coming in to do the same thing. But at some point such ideas may come at too high a price and T-Mobile will just have to walk away.

After all, a T-Mobile facing a resurgent #4 (whether the underlying protagonist is Dish, Amazon, private equity, or some combination thereof) while managing a massive integration is perhaps not as tasty a prospect as simply facing Sprint straight up. And such a deal may not mollify the coalition of state attorneys general who are suing to stop the deal anyway.

So they may be negotiating a $6B deal, but I think that when it comes to signing that deal T-Mobile may just decide it's not worth the hassle. If these bidders for a combination for Sprint's spectrum, Boost division, and other assets see a good deal, why were they not bidding for the rest of Sprint before? They just want the good stuff, and to let T-Mobile digest the rest.  After all, if you're going to face such a competitor, why let them get partway without carrying the baggage they clearly don't want to carry.

Feels like decision time is approaching though.

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Categories: Government Regulations · Mergers and Acquisitions · Wireless

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