T-Mobile US Inc (NASDAQ:TMUS) stock is up today following talk of a tie-up for the company by analysts at JP Morgan.
JP Morgan analysts believe that T-Mobile US Inc may chose to to merge with a fellow wireless company. Specifically, it thinks a merger with Sprint Corp (NYSE:S) is possible. It cites the more friendly nature for mergers that President Donald Trumps administration will likely bring as one reason for this.
JP Morgan says the chance of a merger between T-Mobile US Inc and Sprint Corp now sits above 35%, which is an increase over the 25% chance from last year. It also sees a 70% chance of approval from regulators if a merger is announced. TMUS and S tried to merge in 2014, but were unable to due to continued resistance from regulators.
SoftBank Group Corp (OTCMKTS:SFTBF) and Deutsche Telekom AG (ADR) (OTCMKTS:DTEGY), the parent companies of Sprint Corp and T-Mobile US Inc, are also likely interested in a merger of the two. SFTBF said last year that it intends to expand its investments in the United States.
“We believe that parents Softbank and Deutsche Telekom have increased their preference for a tie-up in the last six months and that the value of about $5 billion of annual synergies is enough to smooth over most disagreements on relative value,” JP Morgan analyst Philip Cusick told Reuters.
Sprint Corp just announced today that it has purchased a 33% stake in music streaming service Tidal. The stake in the service reportedly cost the wireless provider $200 million.
TMUS stock was up 1% and S stock was up 3% as of Monday afternoon.