Apr 30, 2018

T-Mobile could owe Sprint $600 million if it walks away from the deal

Ina Fried

Sprint CEO Marcelo Claure and T-Mobile CEO John Legere — Sprint CEO Marcelo Claure (left) and T-Mobile CEO John Legere (right). Photo: T-Mobile

Sprint and T-Mobile executives said Sunday that neither company will owe the other if regulators block their proposed deal. However, a filing on Monday revealed that T-Mobile could owe Sprint $600 million under certain other circumstances, if it decides to back away from the transaction.

Why it matters: Despite the confidence of both CEOs, a good deal of uncertainty still hangs over the deal, including whether it can gain regulatory approval.

Breakup fee: The breakup fee would not apply if regulators oppose the deal, but rather if T-Mobile walks away from the deal and Sprint's credit rating remains above a certain level, among other conditions.

No shopping around: Under the terms of the deal, which were filed with the SEC on Monday, both Sprint and T-Mobile agreed not to solicit any alternative to their combination.

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T-Mobile could owe Sprint $600 million if it walks away from the deal

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