September 14, 2009
Engadget has a rumor that Deutsche Telekom is eyeing Sprint Nextel
for acquisition. There are a number of issues here:
- DT owns T-Mobile.
- T-Mobile is GSM and Sprint is iDEN and CDMA. Not much value in mixing that many signaling protocols. No synergy.
- FTC and DOJ may not like that much Public Safety being foreign owned.
- The cost would be staggering.
By that I mean that DT isn't exactly experiencing huge growth to pay back a multi-billion dollar acquisition of a declining asset. And Sprint is declining. If DT did want to enter the US, it could have bought Virgin Mobile as a foothold. Or done a JV (joint venture) with SK Telecom. These would have been easier and cheaper acquisitions.
UPDATE: MarketWatch article
about possible merger and Reuters notes
the rise in Sprint's stock and bond prices on these rumors. From this you can almost feel that the bankers are floating a balloon to take advantage of the deltas.