Japan's SoftBank and Deutsche Telekom from Germany have reportedly shelved plans to merge their US subsidiaries, citing too few prospects of gaining regulatory approval. Shares in the companies fell sharply on the news.
The Japanese cellphone carrier SoftBank and its US subsidiary Sprint have rescinded their bid to acquire wireless provider T-Mobile US, the Nikkei business daily reported Wednesday.
SoftBank and Deutsche Telekom, the German parent company of T-Mobile US, cited the unlikelihood of gaining approval from US regulators as the reason for pulling the plug on the deal.
"For months, we have been negotiating the deal, but we have little prospect of gaining approval from the relevant US authorities," the newspaper quoted an unnamed SoftBank executive as saying. "We have decided to end the negotiation for now."
Both the US Department of Justice and the Federal Communications Commission had cautioned that the proposed merger of the No. 3 and No. 4 cellphone carriers in the US could harm competition in the world's biggest telecommunications market.
Shares in Sprint and T-Mobile fell sharply in after-hours trading on the news. Sprint shares fell more than 15 percent while shares in T-Mobile were down almost 9 percent. Shares in Sprint's parent company, SoftBank, also dropped 3.5 percent Wednesday.
cjc/uhe (dpa, AP)