NEW YORK — T-Mobile US Inc., the most eligible company in the U.S. wireless industry, has another suitor on its hands. Upstart French telecom company Iliad SA on Thursday said it has offered $15 billion for a majority stake.
Iliad is injecting itself into the courtship of T-Mobile, the fourth-largest US cellphone carrier, and Sprint Corp., the No. 3. Sprint has reportedly been in talks with T-Mobile for months, but no deal has been announced. Analysts believe U.S. regulators are likely to block the T-Mobile/Sprint pairing due to concerns that it would reduce competition and thus raise prices for consumers.
Iliad is much smaller than T-Mobile US, and it doesn’t have the financial might to buy the whole company. It’s offering $15 billion in cash for 57 percent of T-Mobile US, at $33 per share. That’s less than Sprint’s reported offer of around $40 per share.
Iliad, however, claims that the shares it doesn’t buy will be worth $40.50 each thanks to “synergies” between Iliad and T-Mobile, indicating that it thinks the combined business will be able to expand more rapidly or cut costs. However, cross-border deals in telecommunications rarely yield substantive synergies.