SoftBank Moving Closer to Acquiring T-Mobile

Japanese telecommunications giant SoftBank is moving in on everyone’s favorite fourth place American wireless telecommunications service provider, T-Mobile, merely five months after purchasing Sprint in July. Rumors have been circulating for some time now that SoftBank has been moving on making a bid through its United States subsidy, Sprint. According to this newest report, SoftBank plans on acquiring $19 billion worth of T-Mobile’s shares – the majority of the company – in early 2014.

The merger would make SoftBank the second largest mobile carrier in the world, however the deal is far from final. Discussions between the two companies are still early, according to the latest report. At least one potential deal that would have consisted of a stock swap, which was SoftBank’s preferred method, has already been more or less shot down by T-Mobile’s parent company, European based Deutsche Telekom.

SoftBank believes that the merge would allow the company to better compete with American giants AT&T and Verizon, the two largest mobile carriers in the United States. The potential combined customer base of Sprint and T-Mobile would easily and immediately put SoftBank in direct competition with the two giants.

Of course, T-Mobile has been through this before – in 2011, AT&T attempted to purchase a controlling share of T-Mobile for $39 billion. The deal fell through as the United States Department of Justice blocked the takeover attempt, believing that the deal would hurt customers and lead to “higher prices, fewer choices, less innovation” in the mobile space in the United States. This SoftBank and Sprint merger would have to go through the same approval process that AT&T went through at the time, which could potentially lead to the same concerns.