T-mobile gets antitrust OK for US$26B Sprint merger
T-mobile US Inc won U.S. antitrust approval for its US$26 billion takeover of rival Sprint Corp, the Justice Department said on Friday, clearing a major hurdle to a deal that would merge the nation’s third and fourth largest wireless carriers.
The firms have agreed to divest Sprint’s prepaid businesses including Boost Mobile to satellite television firm Dish Network Corp to move ahead with the merger. Dish will be the fourth largest U.S. wireless carrier if the deal goes through.
T-mobile chief executive John Legere, who will be the CEO of the combined firm, said the proposed deal would deliver a 5G network with lower prices, better quality and thousands of jobs, while unlocking US$43 billion in synergies.
Assistant Attorney General Makan Delrahim, head of the Justice Department’s antitrust division, said the deal would hasten the development of 5G, the next generation of wireless.
Shares of T-mobile, which is about 63 per cent owned by Deutsche Telekom AG, were up 4.7 per cent at US$83.69. Shares of Sprint, which is about 84 per cent owned by Softbank Group Corp, rose 5.3 per cent to US$7.83. Dish was up 1.5 per cent at US$39.76.
But the deal still faces a significant challenge.
A group of U.S. state attorneys general filed a lawsuit in federal court in New York to block the merger on antitrust grounds, arguing that the proposed deal would cost consumers more than US$4.5 billion annually.
New York State Attorney General Letitia James indicated the lawsuit would continue, at least in part because of what critics see as Dish’s failure to live up to pledges it had made.