Rumors are again whirling that T-Mobile and Sprint are weighing a tie-up, but the No. 3 and No. 4 U.S. wireless players will need to come eye-to-eye on a merger agreement before deciding whether they can muster a successful defense of a deal regulators are likely to deem anti-competitive.
“I think that’s the biggest issue that needs to be ferreted out,” said Howard Berkower, a McCarter & English LLP partner.
While in theory the two could explore a merger of equals, those deals still tend to have one company taking the lead after the deal closes, he noted.
“‘Merger of equals’ is almost always a euphemism for one company to save face because it’s almost never a merger of equals. It appears like that and that’s how it’s sold to the public, but almost all of the merger of equals transactions, when they go through, there’s always one company that’s the primary parent,” Berkower said.