Share prices sink; Claure travels to Japan; Legere says his style is worth billions

A tug-of-war between Germany and Japan may be tearing apart the planned merger of T-Mobile US and Sprint. Both Bloomberg and Japan’s Nikkei news service report breakdowns in the ongoing talks due to Japanese carrier SoftBank’s unwillingness to relinquish control of the merged company. According to Nikkei, SoftBank initially planned to sell a controlling interest in Sprint to T-Mobile parent Deutsche Telekom, but decided late last week that the proposed deal would give too much decision-making power to the German telecom company.

According to Bloomberg, the two sides are also unable to agree on valuation. Since Deutsche Telekom was expected to use T-Mobile US stock to buy Sprint, the two sides would need to agree on the value of both companies.

Shares of Sprint and T-Mobile US were both down by much more than the overall market on Monday as investors realized that the expected deal might not be happening. Both stock prices recovered somewhat after CNBC reported that SoftBank is not planning to withdraw from the deal right away.

If SoftBank does withdraw from the deal, the company’s chairman Masayoshi Son will need to decide whether to try to find another buyer or partner for Sprint. The carrier has slipped to fourth place based on subscriber numbers, but has recently reported improvements in both network performance and customer additions. Sprint holds more spectrum than any other U.S. carrier, but it borrowed heavily to acquire it and its interest payments limit its ability to invest in equipment to deploy its spectrum.

SoftBank’s leadership was thought to be meeting with Sprint CEO Marcelo Claure last week, who publicly announced a trip to Tokyo. Sprint has not issued any comments on the possible merger, and both Sprint and T-Mobile US skipped their traditional calls with Wall Street analysts when they announced earnings last week.

If the two companies head into the holiday season without a merger plan in place, consumers could enjoy another round of price wars, possibly around the newest iPhones. T-Mobile US has historically taken the lead in cutting prices and has forced other carriers to match its data discounts to stay competitive.

Over the weekend, T-Mobile US CEO John Legere tweeted a link to a CNBC video interview in which he says that his highly visible public persona is a key contributor to T-Mobile’s success.

“There is no way that my peer CEOs are going to do this; there is absolutely no way,” said Legere. “But it’s a competitive advantage, and I think it’s worth billions.”

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