Deals

Sprint and T-Mobile borrow money from parents for August wedding

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The banks are lining up. When that happens, you know that the betrothed, in this case T-Mobile and Sprint, are serious about getting hitched.

Sprint has eight banks lined up to finance the deal. In the long run, the deal may be Sprint and T-Mobile’s only chance to be somebody in the U.S. cellular market, currently a two-horse race between AT&T and Verizon.

Reports say that Sprint’s parent, Japan’s Softbank, will make a bridge loan of $20 billion to Sprint to support the deal, and T-Mobile US will be getting $20 worth of debt restructuring.

In all, five banks are involved: JPMorgan Chase & Co, Goldman Sachs Group, Deutsche Bank AG, Bank of America Merrill Lynch, and Citigroup Inc.

The reports say Sprint also approached Japanese banks Mizuho Financial Group Inc, Bank of Tokyo-Mitsubishi UFJ Ltd, and Sumitomo Mitsui Financial Group.

T-Mobile and Sprint are trying to get all the money lined up so that they can announce a merger in August.

Softbank and T-Mobile owner Deutsche Telekom AG have agreed to broad terms of a deal. Sprint will pay about $40 per share for T-Mobile, which will value T-Mobile at about $32 billion.

T-Mobile parent Deutsche Telekom will pay roughly $1 billion if it tries to get out of the deal, while Sprint parent Softbank has agreed to pay $2 billion if the deal fails to pass regulatory muster.

Via: Reuters

More about the companies and people from this article:

an American telecommunications company based in Overland Park, Kansas. The company owns and operates Sprint, the third largest wireless telecommunications network in the United States, with 55 million customers, behind Verizon Wireless... read more »

T-Mobile USA, Inc. is the U.S. wireless operation of Deutsche Telekom AG. By the end of the first quarter of 2012, approximately 129 million mobile customers were served by the mobile communication segments of the Deutsche Telekom grou... read more »

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