Bloomberg reported recently the two carriers are "putting the finishing touches" on a final agreement that is expected to be announced when they report quarterly earnings later this month. Now, it appears that some of the details of the deal are starting to surface, and it appears that the deal would not include a breakup fee.
The lack of a breakup fee means that both sides could urge regulators to approve the deal, without it helping one side over another.
Sprint and T-Mobile are determined to make it happen and the only hurdle that they need to jump on for the big merger to come to pass is getting it approved by market regulators.
"It's not surprising to see this finally being worked out as Sprint is a very eager seller and T-Mobile - while operating from a position of great strength - needs the added heft that Sprint brings it to prepare for the next wave of competition with AT&T and Verizon", he said. However, now under a new administration, the feeling is that regulation will be scaled back a bit, something that President Trump campaigned on, and has already been doing in other areas.
A traditional breakup fee isn't expected to be included in the final agreement, two of the people said, reducing the risk for both companies if USA regulators reject the merger. Majority owner SoftBank Group Corp. reportedly would accept a valuation around Sprint's market price.
There's also been a growing view among analysts that T-Mobile, controlled by Deutsche Telekom (DTEGY), will not pay a big premium if the two companies agree to merge in an all-stock deal. Of course, all of this should be made official in the next few weeks if the recent reports are indeed correct.