The merger of Sprint and T-Mobile could finally get approval from the Department of Justice – but two analysts believe that a combination will not materialize in the end.
Let me approve, "BTIG's Walter Piecyk told Squawk Box on Monday, referring to talks between telecom companies Sprint and T-Mobile.
" The question is whether T-Mobile will Much To Give Up That You Need The New York Times reported on Friday that merger approval for Sprint and T-Mobile might be close. The decision depends on the Justice Department's top cartel authority, Makan Delrahim, who recently approved the acquisition of 21
"Nobody really knows what Makan wants to do with this transaction," Piecyk said. "We are dealing with a very insecure regulatory environment that makes it harder to make these strategic decisions."
For Piecyk, the chances of getting a degree are "less than 50-50".
Craig Moffett of MoffettNathanson sees a similar scenario, as he also declared "Squawk Box" on Monday.
"Even if you say 70-30 Delrahim approves of losing 70-30 states and the deal comes through, even then you're only talking about a combined probability of 49% that the deal is approved. people are still too optimistic that this deal will come off. "
Moffett also wrote a note in late May calling for merger talks" Crazy Town. "
To complete the deal, Sprint and T-Mobile would have to sell the prepaid mobile service Boost, which is currently owned by Sprint. Bloomberg reported that the companies have turned to Altice, Charter and Dish Network to sell the service. The asset and the airwaves operated by Sprint are the subject of a lawsuit by four Attorney Generals in New York and California.
For Moffett, the conditions for these companies are set strategically. "What the DOJ does what Delrahim really wants is to create a set of conditions under which T-Mobile decides they want to go away, so he never puts it in the awkward position of saying yes or no."
There is still a very real chance that this deal will be blocked in one way or another. "" T-Mobile keeps itself, they have free cash flow, they can buy back shares … Sprint only has to invest. And at this point, it may be too late because the brand may be overly damaged, and maybe it is. "Something that Meakin must consider."
"This was a very strange process."