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Sprint, T-Mobile Sign Merger Agreement

T-Mobile and Sprint yesterday announced a $26 billion merger agreement, a deal long in the making.

The merger specifies an all-stock transaction at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of 9.75 Sprint shares for each T-Mobile US share, the companies reported. This equates to a value of approximately $59 billion for Sprint and $146 billion for the merged company based on April 27 closing share prices, they said.

In his inimitable style, T-Mobile CEO John Legere touted the merger in a company blog post: "This deal will be like putting jet fuel in the Un-carrier engine! The New T-Mobile will be a bigger, better, stronger disrupter able to drive fierce competition in the converging wireless, video, and broadband space. As the CEO of the New T-Mobile, I promise you this: We will shift this Un-carrier revolution into overdrive."

In their joint press release, the companies pointed to the "combination of spectrum holdings, resulting network scale, and expected run rate cost synergies of $6+ billion, representing a net present value (NPV) of $43+ billion" for their ability to "disrupt the marketplace and lay the foundation for U.S. companies and innovators to lead in the 5G era."

Legere, who, yes, will be CEO and a director of the merged company, to be known as T-Mobile, shared a video on the news along with Sprint CEO Marcelo Claure:

At this point, the only other named executives for the merged company are Mike Sievert, current COO of T-Mobile, and Tim Höttges, T-Mobile chairman. Both men will carry these same titles at the combined company, with Sievert also serving as president. Claure will serve on the new board, along with Masayoshi Son, current CEO and chairman SoftBank Group, which gave up its control of Sprint to make the deal possible. Other executives and board members will be determined during the closing period.

T-Mobile and Sprint boards have approved the transaction, which would give SoftBank a minority stake, of about 27%, and Deutsche Telekom, T-Mobile's owner, around a 42% stake and board control.

The companies said they expect the deal to close no later than the first half of 2019, should it meet customary closing conditions, including regulatory approvals. Headquarters will be in Bellevue, Wash., and Overland Park, Kan. Branding strategy -- for names such as T-Mobile, Sprint, MetroPCS, Boost Mobile, and Virgin Mobile -- will be determined following the transaction's close.

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