SoftBank Corp (TYO:9984) (PINK:SFTBF) is targeting a possible merger with T-Mobile US Inc (NYSE:TMUS) if its $20.1 billion acquisition agreement with Sprint Nextel Corporation (NYSE:S) fails. The Japanese telecommunications company is discussing a possible agreement with Deutsche Telekom AG (FRA:DTE) (OTCMKTS:DTEGY), according to a report from Paritosh Bansal and Soyoung Kim of Reuters.
Softbank In Talks With Deutsche Telekom:
According to sources, SoftBank Corp (TYO:9984) (PINK:SFTBF) is in talks with Deutsche Telekom AG (FRA:DTE) (OTCMKTS:DTEGY) as an alternative to ensure its entry in the United States market. The two companies started their dialogue over a possible merger deal for T-Mobile Us Inc (NYSE:TMUS) last year. The dialogue between the two companies deepened after DISH Network Corp (NASDAQ:DISH) submitted an unsolicited counter offer to acquire Sprint Nextel Corporation (NYSE:S) for $25.5 billion.
In April, SoftBank Corp CEO Masayoshi Son criticized the counter bid of Dish Network Corp (NASDAQ:DISH) as “incomplete and illusory” and he emphasized that it has no experience in the industry.
Sources speculated that SoftBank Corp (TYO:9984) (PINK:SFTBF) might offer to acquire a 74 percent stake of Deutsche Telekom AG (FRA:DTE) (OTCMKTS:DTEGY) in T-Mobile US (NYSE:TMUS), which has market value of $15 billion.
The report regarding the alternative plan of the Japanese telecommunications company to strike a merger agreement with Deutsche Telekom AG (FRA:DTE) (OTCMKTS:DTEGY) came ahead of the scheduled shareholders meeting of Sprint-Nextel Corporation (NYSE:S) on June 12 for the approval of its deal with SoftBank Corp (TYO:9984) (PINK:SFTBF).
Last month, we noted that the merger between SoftBank and Sprint received an approval from United States Foreign Investment Committee, which is responsible for monitoring transactions that would affect the national security of the country. The two companies signed a national security agreement with the federal government. Under the terms of the agreement, the U.S. has veto power over the equipment purchases of Sprint Nextel Corporation (NYSE:S) under certain circumstances, and it has the right to appoint a four-member oversight committee to ensure that both companies are following national security laws.
The sources emphasized that SoftBank is still serious in pursuing its deal with Sprint. The T-Mobile US merger is just a plan B.