Dish and T-Mobile US in merger talks - WSJ

By Reuters

Jun 04, 2015 08:53 AM EDT

Dish Network Corp (DISH.O) and T-Mobile US Inc (TMUS.N) are in talks over a merger that would combine the second-largest satellite TV operator in the United States with the fourth-largest wireless carrier, the Wall Street Journal reported.

Dish and T-Mobile US shares were up 8 percent and 12.8 percent respectively in premarket trade on Thursday, while those of T-Mobile's majority owner Deutsche Telekom (DTEGn.DE) were up 1.3 percent -- the only rise among German blue-chip stocks.

A deal, which has been mooted in the past, would fit with Deutsche Telekom's stated interest in partnerships to strengthen its U.S. business after failing to sell it last year. It would also join a wave of tie-ups in the telecoms and TV industries as companies look to add services for customers.

Representatives at Dish and T-Mobile US did not immediately respond to emails seeking comment outside regular U.S. business hours. A spokesman for Deutsche Telekom (DTEGn.DE), which owns about 66 percent of T-Mobile US, declined to comment.

The two sides have agreed T-Mobile Chief Executive John Legere would serve as the CEO and Dish CEO Charlie Ergen would become the combined company's chairman, the Journal said, citing people familiar with the matter. (on.wsj.com/1KaQWjw)

However, a purchase price and the structure of the deal are still undecided, the newspaper said.

T-Mobile has a market capitalization of about $31 billion, while Dish's is around $33 billion.

"It is clear that Deutsche Telekom is looking for future prospects in the United States," a source close to Deutsche Telekom's management board told Reuters, adding it had no knowledge of talks between T-Mobile US and Dish.

Dish and T-Mobile US have previously floated the possibility of a deal. Ergen said earlier this year he was "impressed" by T-Mobile US, while Legere said it made sense for T-Mobile US to team up with Dish.

Dish, a surprise winner in the record-setting U.S. sale of airwaves for mobile data in January, has amassed wireless spectrum and recently went into streaming TV to offset the loss of pay-TV subscribers. However, what Dish plans to do with the newly-acquired spectrum remains unclear.

T-Mobile US has been looking to buy spectrum from smaller rivals, according to media reports.

The company has turned around years of subscriber losses with cut-price deals, marketing and wireless plans in recent quarters. While these initiatives have led to customer gains, they have pressured T-Mobile US's margins.

Last year, Deutsche Telekom tried to sell T-Mobile to Sprint Corp (S.N) but the No.3 U.S. carrier dropped its bid after regulatory resistance. French operator Iliad SA (ILD.PA) also abandoned its attempt to buy T-Mobile US last October.

T-Mobile US's rival AT&T Inc (T.N) is close to wrapping up its $49 billion deal for Dish competitor DirecTV (DTV.O), while Charter Communications Inc (CHTR.O) is seeking to remake the U.S. cable television industry by acquiring larger rival Time Warner Cable Inc (TWC.N) for $56 billion.

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics