Sprint has abandoned its plans to buy T-Mobile, The Wall Street Journal and others are reporting.
Sprint, through its majority shareholder SoftBank, has been in negotiations to buy T-Mobile for the last few months, reportedly for $US40 per share, or about $US32 billion.
Bloomberg reports that Sprint will announce a new CEO Wednesday who will replace the current CEO, Dan Hesse.
Both stocks got crushed on the news. T-Mobile’s stock was down as much as 9% in after-hours trading. Sprint was down as much as 16%.
The merger would have created a carrier large enough to compete with Verizon and AT&T, the two largest carriers in the U.S. in terms of subscribers and revenue by a longshot.
However, the merger also would have faced intense scrutiny from government regulators. AT&T tried to buy T-Mobile in 2011, but the deal got shot down by the government. CNBC’s David Farber reports that regulatory concerns eventually killed the Sprint and T-Mobile merger.
T-Mobile is an interesting turnaround story. The carrier was bleeding subscribers at the end of 2012 when CEO John Legere took over. In 2013, Legere began making several moves to scoop up new subscribers. Since then, T-Mobile started carrying the iPhone, eliminated contracts, and started an offer to pay early termination fees for customers switching over from other carriers. T-Mobile is now the fastest-growing carrier in the U.S.
All that growth has made T-Mobile a tasty acquisition target. Last week, French company Iliad made an offer to buy T-Mobile, but T-Mobile rejected it.
Meanwhile, Sprint has been taking it on the chin. It’s losing subscribers and its network isn’t as robust as AT&T or Verizon’s.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.