Sprint and T-Mo Merger, If OK’ed, Will Affect Tower Market

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On Sunday, Sprint and T-Mobile, in a bid to create a nationwide 5G network, announced an all-stock merger valued at $146 billion. The merger would still need to clear anti-trust examination before it is formalized. T-Mobile parent company Deustsche Telekom would control the merger and have it run by T-Mobile, according to the Wall Street Journal. This is the third attempt to reach an agreement by the two companies over the past few years.

T-Mobile CEO John Legere said in a tweet, the deal will form “the highest capacity network in history” and put the combined company in direct competition with AT&T and Verizon.  I’m excited to announce that T-Mobile and Sprint have reached an agreement to come together to form a new company – a larger, stronger competitor that will be a force for positive change for all U.S. consumers and businesses!”

Spencer Kurn market analyst for New Street Research said, “If the deal is approved, we would cut our valuation by 6% for AMT, 18% for CCI, and 12% for SBAC. The towers have underperformed the broader index by 7-10% since deal reports resurfaced in the press a few weeks ago. While a deal scenario would still present ~10% downside for CCI, we believe it has been largely priced in for AMT and SBAC,” Kurn said.

Sprint’s market value is $26 billion, with T-Mobile weighing in at $55 billion (based on Friday’s closing prices).

The Wall Street Journal yesterday said the deal will face some pushback from Washington, as big mergers have met resistance. The Justice Department blocked AT&T and Time Warner in November.

April 30, 2018

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