News of a possible merger between T-Mobile and Sprint / Nextel has been met with reactions ranging from apathetic to negative. Talks between Sprint and Nextel, and T Mobile, have been going on for the past few months, and are now at the point of determining the appropriate valuation for the respective companies.
While “valuation” may sound more like a purchase than a merging of the two companies, the actual transaction would have only shares of the merged company, not cash, exchanging hands, with T-Mobile assuming a majority stake-holder position (in other words, essentially acquiring Sprint Nextel).
Sprint Nextel, which is valued at nearly half of T-Mobile’s worth, nonetheless had revenues that were 50% more than those of T-Mobile.
Said Timotheus Hoettges, CFO at Deutsche Telekom, T-Mobile’s parent company, “In general, all options are open in the U.S. – the sale of the whole business or of part.”
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