Sprint Drops T-Mobile Acquisition Plan ; CEO to be replaced
Telecom major Sprint has dropped the plan to acquire controlling stake in T-Mobile, as per media report published in Bloomberg. The company is also planning to appoint Marcelo Claure as CEO.
As per the sources, Sprint has dropped the plan as the regulatory approval process would be too difficult to achieve. Sprint is the third largest telecom operator in the US market, followed by T-Mobile. The regulators have expressed in the past that there should be at least four major players in the telecom market to offer enough of options to the consumers.
Sprint management is also in the process to replace CEO Dan Hesse with Marcelo Claure. Hesse has been serving as CEO of the company since 2007.
Overland Park, Kansas-based Sprint announced its plan to acquire T-Mobile in December 2013. The stock price offered by Sprint was much higher compared to market price of the stock in December. Last week, French telecom firm Iliad offered to buy stake in T-Mobile in an all-cash deal. However, the French company offered lower valuation compared to the one offered by Sprint.
T-Mobile remains an attractive buy for other companies. The fourth largest telecom operator has been aggressively marketing its data and calling plans and has been successful in increasing subscriber numbers.
In the after-hours trading, Stock price of Sprint was down by 15.6 percent. T-Mobile was down by 8.8 percent.
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