Sprint Drops Plans to Buy T-Mobile
Updated at 11:25 AM PST on Wednesday, Aug 6, 2014
Sprint will no longer bid to acquire T-Mobile after finding it too difficult to get regulatory approval, according to reports.
Sprint abandoned the deal and will replace its outgoing chief executive officer Dan Hesse with Marcelo Claure, the Wall Street Journal reported. Apparently the negotiations included a "drop dead" clause where both parties could walk away if the deal wasn't complete, Reuters reported.
Sprint decided to kill the acquisition on Tuesday after deciding that it would take too much to gain acceptance from regulators, the WSJ reported. Buying T-Mobile would combined the country's third- and fourth-largest carriers which would give consumers fewer options for wireless service. A visit with U.S. Justice Department and the Federal Communications Commission officials illustrated to Sprint that it would face difficulty in the deal along with opposition i it decided to bid together for more spectrum.
Faced with such obstacles, Sprint decided to walk away from the $32 billion deal which isn't surprising. The $32 billion price tag likely was too much once the company realized how long and difficult the deal would be. Fighting government regulators would also prove costly.