After months of maneuvering to acquire T-Mobile, Sprint has decided to call the whole thing off.
According to a report in the Wall Street Journal Tuesday, the wireless operator got more than it bargained for when it faced the complication of seeking regulatory approval. Sprint, now owned by Japan’s Softbank, discovered that was no easy feat, said the WSJ’s unnamed source. So it chose to put the kibosh on its acquisition aspirations.
T-Mobile may not be left alone for long. It reportedly stiff-armed a $15 billion cash offer from French telecommunications outfit Iliad in hopes of forcing it to sweeten the pot. Sprint’s withdrawal, however, may force T-Mobile to give Iliad a second look.
Either way, Verizon and AT&T—the two leading U.S. cellular providers—can take a breather, since it’s now clear that the nation’s third and fourth-place runners up won’t be joining forces to take them on. This is undoubtedly satisfying to AT&T, which had to abandon its own bid for T-Mobile in 2011 after the Justice Department raised antitrust concerns.
Changing Of The Guard At Sprint
Bloomberg, via Twitter, also reported that Sprint plans to announce a new CEO to replace current chief Dan Hesse, possibly as soon as tomorrow. It’s not yet clear whether Hesse is falling on his sword as a result of the failed merger, or if Softbank has had a change in the works for a while.
Sprint ending talks to buy @TMobile, planning to announce new CEO soon as tomorrow, via @BloombergNews
— Emily Chang (@emilychangtv) August 5, 2014
According to Recode, Sprint plans to name Marcelo Claure to the post. Claure, a Sprint board member since last January, is currently CEO at the wireless distributor Brightstar. Softbank holds a majority stake in Brightstar.
Feature photo of outgoing Sprint CEO Dan Hesse by XPRIZE Foundation
UPDATE: Sprint made the CEO swap official Wednesday morning. For anyone worried about Hesse, don’t be. Recode reminds us that he has a rather cushy landing pad: a $40 million dollar severance package.