T-Mobile-Sprint Merger Reportedly Gains Seal Of Approval From US DOJ
Sprint and T-Mobile announced that they intended to merge with T-Mobile CEO John Legere leading the newly merged company last year. Today, a report is going around that the U.S. Department of Justice plans to approve the $26 billion merger between the two cellular carriers on Thursday. However, the deal will have some conditions attached to it.
The big condition is that certain wireless assets must be sold to Dish. CNBC cites sources close to the matter as saying that the DOJ is requiring T-Mobile to sell its pre-paid mobile division to Dish with the satellite TV provider paying $1.4 billion in return. Dish will also pay $3.6 billion over time for spectrum assets. The sources claim that the merged T-Mobile and Sprint entity is expected to generate $43 billion in synergies as a result of the merger.
The DOJ had originally warned T-Mobile and its parent firm Deutsche Telekom that it would need to sell assets like wireless spectrum licenses and make other promises to conserve competition in the cellular market. T-Mobile pushed back on that requirement wanting Dish to be limited to a spectrum capacity of 12.5%. T-Mobile also wanted to restrict any strategic Dish investor to 5%.
News of the approval for the merger sent Sprint shares up 6.3% in trading, T-Mobile rose 1.9%, and Dish dropped by about 2%. If the merger does get approval this week, it could still face opposition as several states have expressed concerns over the deal.
Sprint opened up 5G networks in four major U.S. markets back in May; the four markets were Atlanta, Dallas-Ft Worth, Houston, and Kansas City. T-Mobile has also kicked off limited 5G connectivity in a handful of markets.