Deal News: Softbank Takeover Coming
For weeks shareholders of Sprint (NYSE:S) , Softbank (9984:Tokyo), T-Mobile (NYSE:TMUS) , and Dish (NASDAQ:DISH) have watch their positions moved rapidly to the upside. Increasing consolidation within the mobile telecommunications space has brought a number of speculatory ideas to Wall Street. Over the last couple week, shares of T-Mobile have soared higher as traders positioned themselves for a potential buyout offer from Softbank, the company that bought Sprint earlier this year.
Things got a little more interesting on Christmas morning when it was announced the speculation might be true. Sources close to the companies reported that they are in stages of talks, and a deal may be coming next year.
Sprint has been interested in consolidating with T-Mobile for years and top executives from both companies have stated consolidation was necessary tool in the U.S. wireless market. Cooperation in infrastructure and equipment orders would create a stronger rival against the two biggest players, AT&T (NYSE:T) and Verizon (NYSE:VZ) . Over the last couple year, the two behemoths have controlled the majority of the market leading some consumer groups to push back against the companies.
Back in 2011, both the Federal Communications Commission and the Justice Department chiefs have signaled they will take a hard line in scrutinizing consolidation bids. The two organizations turned down AT&T’s application to acquire T-Mobile in 2011 due to competition concerns.
Having a third large competitor in the mix should help to diversify the space. In the coming weeks shares of T-Mobile should rise a result of the speculation talks. If Dish does decide to get into the mix, things could get even hotter. SoftBank shares dropped 0.5 percent to 8,770 yen on Wednesday in Japan.
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