Warner starts on office towers
13 states and District of Columbia sued to block T-Mobile from buying Sprint.
The Gehry-designed buildings will mark a major expansion of the Burbank studio’s headquarters.
T-Mobile US Inc.’s bid to buy wireless rival Sprint Corp. is in a judge’s hands after the companies made their final plea for him to reject a state lawsuit seeking to block the deal.
U.S. District Judge Victor Marrero in New York heard closing arguments Wednesday in the states’ antitrust lawsuit over the $26.5-billion deal, which would unite the third- and fourth-largest U.S. wireless carriers and create a rival to market leaders AT&T Corp. and Verizon Communications Inc.
Marrero, who asked no questions of the parties, said he will rule as “promptly as possible.” It’s been almost two years since the companies announced their planned merger in April 2018. T-Mobile and Sprint had discussed a merger previously, but their proposals were rejected by Obama-era federal regulators.
The companies had better luck with the Justice Department and Federal Communications Commission under President Trump, but then state attorneys general led by New York’s and California’s filed a lawsuit arguing that the deal would eliminate competition between T-Mobile and Sprint and lead to billions of dollars in higher costs for subscribers.
Marrero may take a couple of months to decide. The decision allowing AT&T Inc. to buy Time Warner took about a month and a half, and the ruling blocking the tie-up of health insurers Anthem Inc. and Cigna Corp. was issued about two months after the arguments in the case.
If the judge blocks the deal, it would leave Sprint a hobbled fourth competitor, weighed down by debt and facing a costly rollout of the next-generation wireless technology known as 5G. TMobile Chief Executive John Legere testified at the trial that Sprint would be “sold for parts” if the merger doesn’t go through. Legere and Sprint Chairman Marcelo Claure both attended the closing arguments.
A loss for the companies would be a momentous victory for the states in policing mergers. Thirteen states and the District of Columbia took the rare step of suing to block the deal even though the Justice Department’s antitrust division approved the tie-up.
New York Atty. Gen. Letitia James, who attended the states’ closing argument, said before the hearing that the states are operating under their own authority to investigate and challenge mergers.
“We will continue to look at mergers all across this nation in a wide range of industries that are anticompetitive,” she said.
Investors are increasingly skeptical of the deal’s chances of closing. The spread between T-Mobile’s offer price for Sprint and Sprint’s trading price, an indication of the merger’s prospects, hit its widest mark Tuesday in intraday trading. Sprint’s stock price slipped 0.6% on Wednesday, while TMobile shares rose 0.6%.
The carriers argue that by combining the two companies, the new T-Mobile will have much more capacity in its network and will want to fill it by lowering prices and winning market share.
“They’re going to win customers from AT&T and Verizon,” T-Mobile lawyer David Gelfand told Marrero.