T-Mobile US and Sprint Corporation announced on Thursday, April 29th, that they have entered into a definitive agreement to merge in an all-stock transaction at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share or the equivalent of 9.75 Sprint shares for each T-Mobile US share. Based on closing share prices on the 27th of April, this represents a total implied enterprise value of approximately $59 billion for Sprint and approximately $146 billion for the combined company. The new company will have a strong closing balance sheet and a fully funded business plan with a strong foundation of secured investment grade debt at close.
The merged company will be named T-Mobile, and it will be a force for positive change in the U.S. wireless, video, and broadband industries. The merger of spectrum holdings, resulting network scale, and expected run rate cost synergies of $6+ billion, representing a net present value (NPV) of $43+ billion will supercharge T-Mobile’s Un-carrier strategy to disrupt the marketplace and lay the foundation for U.S. companies and innovators to lead in the 5G era.
The new T-mobile company will have the network capacity to rapidly create a nationwide 5G network with the depth needed to enable U.S. firms and entrepreneurs to continue to lead the world in the coming 5G era, just as U.S. companies did in 4G. The new company will be able to light up a broad and deep 5G network faster than either company could perform separately. T-Mobile deployed nationwide LTE twice as fast as Verizon and three times faster than AT&T, and the merged company is positioned to do the same in 5G with deep spectrum assets and network capacity.
The united company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition. The new company will employ more people than both companies would separately and create thousands of new jobs in the U.S.
Upon closing, the new company will be headquartered in Bellevue, Wash, with another headquarters in Overland Park, Kan.