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MetroPCS in Merger Talks with T-Mobile USA
Published on:
USA based MetroPCS has confirmed rumours that it is in talks that could lead to a merger with T-Mobile USA.
It is reported that the plans would involve merging the two mobile networks into a single network, in which T-Mobile's parent company, Deutsche Telekom would hold a majority stake.
MetroPCS issued a statement confirming the talks, but saying that there can be no assurances that any transaction will result from these discussions, and the company does not intend to comment further unless and until an agreement is reached.
MetroPCS shares jumped by a quarter on the news as the merger is expected to give the enlarged firm a better chance of competing with the two dominant networks, AT&T and Verizon Wireless.
"The talks are at a stage where significant issues have not yet been finalized, contracts have not yet been signed and the conclusion of the transaction is still not certain," Deutsche Telekom said in a statement. "The board of management and supervisory board of Deutsche Telekom have therefore not yet taken the resolutions necessary for such a transaction."
It is expected that the merged company could generate cost savings of upwards US$1.2 billion per year following integration.
The move would be bad news for Sprint though, as MetroPCS has been seen as a potential partner as the smaller networks seek consolidation opportunities.
Tags: [metropcs] [t-mobile usa] [USA]
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