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By Jason Stipp and Jeremy Glaser | 10-11-2012 04:30 PM

Pulling Back or Pushing Forward?

We got news of both progress and backpedaling this week, reports Morningstar markets editor Jeremy Glaser.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to The Friday Five.

Pulling back or pushing forward? We got news of both progress and backpedaling this week. Here to offer his take on the ups and downs is Morningstar markets editor Jeremy Glaser. Jeremy, thanks for joining me.

Jeremy Glaser: Jason, always glad to be here.

Jason Stipp: So what do you have for the Friday Five this week?

Glaser: We’re going to talk about Sprint and Softbank, BAE/EADS, American Express and Wal-Mart, the IMF, and finally Alcoa.

Stipp: Some merger news that we got last week, we thought Sprint may or may not get involved with that. We got some news this week that indicated maybe why they didn’t get involved with that. They are pushing forward in a new way.

Glaser: Last week we were a little bit surprised that Sprint hadn’t thrown their hat into the ring after the surprise announcement that Deutsche Telekom’s T-Mobile was going to be merging with smaller carrier MetroPCS. For a long time, MetroPCS and Sprint seemed to be natural partners. When that didn’t happen, it was a big question mark.

This week we got a better idea of why, and that’s because Softbank, which is a Japanese company and the third largest mobile operator in Japan along with a number of other businesses, is looking to take a 70% stake in Sprint to try to give them the financial strength that they need to help clean up some problems at Clearwire, which is a company that Sprint has a big stake in, and really help Sprint invest in their network, invest in the spectrum that they're going to need in order to be successful and to compete against AT&T and Verizon Wireless for those very lucrative contract customers.

Certainly this deal is far from done. There is probably going to be a lot of regulatory discussion. Our analyst Mike Hodel points out that if this deal were to go through, really almost all the major U.S. carriers, with the exception of AT&T, will have a major foreign owner, have major foreign interest, which could be something that would be disconcerting to some regulators. Even with the cash infusion, it’s still going to be challenging for Sprint to really regain its footing, but I think it's just another chapter in the consolidation we’re seeing in the wireless industry and certainly gives us the information a little bit more color about why Sprint was so quiet last week.

Stipp: In the aerospace sector, we got news of pullback from a big potential merger; that was BAE/EADS. Why did that deal unravel?

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