French telecom major Iliad has given up its pursuit for the purchase of T-Mobile as it gears up to enter the American wireless industry. Initially, Iliad was aggressively trying to purchase T-Mobile from Deutsche Telekom (the parent company). An October deadline had been laid down by the management of Iliad to decide on whether or not its initial offer of US$15 billion would be scaled up, or its purchase offer rejected. At US$15 billion, Iliad would have claimed a 56.6% share in T-Mobile. This will no longer happen, with Iliad dropping its interest in pursuing the deal any further.
Earlier this year, when Sprint had reached the final stages in its acquisition talks with T-Mobile, Iliad announced its offer. When the Sprint deal consecutively fell apart – leading to the stepping down of Dan Hesse, Sprint’s CEO – there were rumors that T-Mobile would be acquired by Iliad. However, those in the know now say that since day one, the Iliad offer was never taken seriously by T-Mobile, as is indicated by the lack of any solid agreement between the two parties. According to a press statement by Iliad, DK and T-Mobile said that they would not take any further bids from Iliad into consideration.
T-Mobile has been showing steady growth over the last one year, with the increasing popularity of its program to buy out the contracts of new subscribers. The intention behind Iliad’s bid was to cut down costs to the tune of nearly US$2 billion if it had successfully gained T-Mobile’s ownership.