Add value to shareholders of corporations

Reference no: EM1343927

Rumors about potential mergers are often a hot topic in the business press. One rumor being floated around recently is a potential merger between mobile phone giants T-Mobile and Sprint. Mergers between two large companies are always complicated, but some have noted the possible synergies in 4G technologies that might be possible in such a merger.

Mergers can bring about great rewards, but also can bring great risks and pitfalls. Do some research concerning the arguments both for and against such a merger from a financial perspective. Don't be too concerned with how consumers may fair, as this is an issue for the government to consider if they have to approve this merger. Instead you are considering this from the point of view of whether or not such a merger would be a profitable undertaking that would add value to the shareholders of both corporations.

Do you think a merger between Sprint and T-Mobile would add value to the shareholders of both corporations?

The main focus of this assignment will be answering the question above. In your answer to this primary question, consider the following issues:

1. The impact on T-Mobile shareholders

2. The impact on Sprint shareholders

3. The financial condition of both corporations

4. Why might T-Mobile and Sprint combined as one company be more profitable than they would if they remain independent?

5. Potential pitfalls - might the combined entity actually be less profitable than either company operating independently?

Reference no: EM1343927

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