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Essay / Research Paper Abstract
This 5-page paper discusses if a potential merger between T-Mobile and Sprint will actually boost shareholder value. Bibliography lists 3 sources.
Page Count:
5 pages (~225 words per page)
File: AS43_MTtelemerg.doc
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Unformatted sample text from the term paper:
lead to ultimate nirvana. Stakeholders hear words such as "synergies," "shareholder value," "win-win" and other business language fluff led to convince media, employees, stockholders and just about everyone else that
the situation will be in everyones best interest. The most recent merger news in the telecommunications industry is the possible "marriage" between T-Mobile
USA and rival Sprint. The idea behind such a merger is that it would have enough clout to beat larger competitors AT&T and Verizon.
Craig Moffett, an analyst with Sanford C. Bernstein & Co., allowed that such a merger between these two companies would be, in his words, "enormously costly and hideously
complicated" (Davis, 2011). However, he allowed somewhat reluctantly, such a merger for these two might be better than trying to operate alone (Davis, 2011).
Aside from the enormous costs and "hideous" complications, would a merger between Sprint and T-Mobile provide value to shareholders of both corporations? Anyone listening to the leaders of
both companies and their PR departments would likely say yes - after all, as Moffett mentioned so reluctantly above, such a merger would put Sprint and T-Mobile on a par
with Verizon and AT&T in terms of size and territory covered. Such a merger would also unify resources and consolidate certain markets, while expanding others. How could such activities fail
to increase shareholder value? Once we get beyond the PR and puffery of synergistic mergers that will increase shareholder value, however, we find
a somewhat different story. Business scholar Wolfgang Kursten (2008) notes that any shareholder who is promised increasing returns and value as the result of a merger needs to be skeptical
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