Similarly to the toll paid by AT&T following its unsuccessful bit to purchase T-Mobile, majority shareholder Deutsche Telekom is seeking a breakup fee of $1 billion if the proposed merger with Sprint falls apart for whatever reason. Additionally, as part of the merger talks, the German parent company is demanding that some of T-Mobile’s management executives not be ousted following a merger.
Deutsche Telekom AG (DTEGn.DE) wants to be compensated by Sprint Corp (S.N) in the event its planned merger with the German firm’s T-Mobile US Inc (TMUS.N) does not win regulatory approval, the Wall Street Journal reported, citing people familiar with the matter. Deutsche Telekom AG (DTEGn.DE), which currently owns 67 percent of T-Mobile, expects a breakup fee of more than $1 billion, according to the people cited in the report. The company also wants T-mobile’s brand and some of its management team to be retained after a merger, the Journal cited the sources as saying. Reuters reported on May 1 that Sprint is facing a battle with U.S. regulators who oppose consolidation in the wireless market on the basis it would inhibit competition. The company is aware it may have to give up some of its spectrum holdings to win over critics, according to a Reuters source.