T-Mobile’s $26 billion merger with Sprint has been given the go-ahead by a U.S. district judge, rocketing the companies’ stock prices upward.
Sprint increased 74% this morning, hitting $8.34. T-Mobile, meanwhile, increased 11% to $93.62. However, the deal won’t officially be done until the California Public Utilities Commission approves the merger.
Attorneys general from 13 states, in addition to the District of Columbia, opposed the deal with a lawsuit. They voiced concerns that a merger would reduce competition in the industry and could drive up cellphone bills.
In a statement, New York Attorney General Letitia James said the states “disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent.” She argued that the ruling represented a “loss” for Americans.
California Attorney General Xavier Becerra said: “Our fight to oppose this merger sends a strong message: Even in the face of powerful opposition, we won’t hesitate to stand up for consumers who deserve choice and fair prices. We’ll stand on the side of competition over megamergers, every time. And our coalition is prepared to fight as long as necessary to protect innovation and competitive costs.”
Other states whose attorneys general brought the suit hailed from Connecticut, Hawaii, Illinois, Maryland, Michigan, Minnesota, Oregon, Wisconsin, Massachusetts, Pennsylvania and Virginia.
T-Mobile and Sprint merger
However, U.S. District Court Judge Victor Marrero rejected the complaint. He said the group failed to convince the court that the deal would prove anticompetitive and increase prices. He also disagreed that Sprint would be able to continue to be sustainable in the long-term without a deal. Finally, he disagreed with the states’ argument that Dish Network would fail to become a viable major wireless company.
As one of the conditions for the merger, T-Mobile and Sprint will deploy a large-scale 5G network in the United States. The high-speed mobile broadband tech promises exponentially faster uploads and downloads that will
The combined companies’ new 5G network supposedly will cover 97% of the U.S. population within three years. FCC Chairman Ajit Pai said the merger will help “close the digital divide and secure United States leadership in 5G.” Just in time for that upcoming 5G iPhone, too.
T-Mobile President and COO Mike Sievert will run the combined company after the merger. Sievert takes over for T-Mobile boss John Legere, who served as chief executive of T-Mobile since 2012.
Source: CNBC
