Sprint plans for long regulatory review of possible T-Mobile deal

As Masayoshi Son pushes for a Sprint takeover of T-Mobile US Inc., the Japanese billionaire is asking banks to commit financing for a longer-than-usual amount of time, underscoring the intense regulatory review he faces.

Lenders to Overland Park-based Sprint Corp. are asking for higher fees in exchange for financing the purchase of T-Mobile, because they expect the deal to face a lengthy approval process, sources told Bloomberg News.

Sprint, whose controlling shareholder is Son’s SoftBank Corp., has been rumored in recent months to be working on a plan to acquire its rival for about $32 billion.

The companies, including T-Mobile shareholder Deutsche Telekom, expect the Federal Communications Commission and the Department of Justice to take at least a year to evaluate the deal, the sources said. The plan is to include a drop-dead date of 18 months after the deal’s announcement — at which point it could be terminated, Bloomberg reported. That deadline could be extended.

Son, the founder of SoftBank, is pursuing the T-Mobile purchase even as regulators insist they want to preserve four competitors in the U.S. wireless marketplace, where Sprint and T-Mobile are No. 3 and No. 4. The Justice Department sued AT&T in 2011 to block its effort to acquire T-Mobile.

SoftBank and Deutsche Telekom already have given consideration to challenging a regulatory rejection of the deal in court, three people said. When its bid for T-Mobile was challenged by the government in August 2011, AT&T initially said it would fight the litigation, only to back down later that year after deciding the costs of continuing were too high.

Son has argued that as technology converges, a new market for Internet services is emerging in which AT&T, Verizon Communications and Comcast are the three giants. He views a combined Sprint and T-Mobile as a counterweight, able to offer wireless high-speed Internet to compete with phone and cable modems.

A spokesman for Bonn, Germany-based Deutsche Telekom, which owns about 67 percent of T-Mobile, declined to comment, as did representatives at T-Mobile and Sprint.

Sprint is asking banks for about $20 billion, while SoftBank is seeking a similar amount, one of the people said, asking not to be identified discussing private information. The funds will also be used to refinance some of T-Mobile’s borrowings, to fund operations and in an auction of wireless airwaves, the people said.

This story was originally published July 15, 2014 at 10:57 AM with the headline "Sprint plans for long regulatory review of possible T-Mobile deal."