Based on the recent flurry of deals in the wireless space, I'm beginning to believe that peer pressure guides more than just teens' wardrobe choices. Finally giving in to the incessant "C'mon, everybody's doing it" mantra, T-Mobile USA parent Deutsche Telekom
T-Mobile offered $27 per share for SunCom, representing a nearly 23% premium to SunCom's closing price of $22 last week. While Dexia SA analyst Rob Goyens estimated the deal to be a pricey 13.1 times 2007 EBITDA, both companies' boards of directors have already approved the merger, based on the estimated $1 billion in saved roaming fees and operating expenses of the combined entity. Should these savings be realized, the premium paid would be worth it.
In the past few months, there has been a rash of bids, mergers, and buyouts in the U.S. wireless market. AT&T
So, let's see. With all these wireless giants already pulling dance partners out onto the floor, who's left still standing by the punch bowl? Oh yeah, Sprint Nextel
Overall, the SunCom deal is a wise one and should help T-Mobile better compete with larger rivals -- if the merger goes smoothly. In terms of operations, it's always tough to combine two companies that have different legacies. But even with the risks, T-Mobile is better off joining in this dance than standing on the sidelines.
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Fool contributor Dave Mock blames all his past -- and future -- blunders on peer pressure. He owns no shares of companies mentioned here. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy never fit in with its graduating class, but looks forward to the reunion to show off what it has become.