DOJ announces agreement on $26 billion merger between T-Mobile and Sprint

RT: John Legere and Marcelo Claure at NYSE 180430
T-Mobile CEO John Legere (L) and Sprint CEO Marcelo Claure pose for pictures on the floor
of the New York Stock Exchange April 30, 2018. Brendan McDermid | Reuters

The Department of Justice announced Friday it has reached an agreement on the more than $26 billion merger between T-Mobile and Sprint.

As part of the agreement, Sprint will divest its Boost Mobile, Virgin Mobile and Sprint prepaid phone businesses. Sprint and T-Mobile will divest some of their wireless spectrum to Dish Network and make at least 20,000 cell sites and hundreds of retail stores available to the company. Dish will also be able to access T-Mobile’s network for seven years.

Makan Delrahim, head of the DOJ’s antitrust division, said without these remedies, the merger would “substantially harm competition.”

“Americans’ access to fast, reliable and affordable wireless connectivity is critically important to our economy and to every American consumer and to their way of life,” Delrahim said in a press conference announcing the agreement.

Delrahim added that the agreement establishes Dish as a “disruptive force in wireless.”

State attorneys general from Nebraska, Kansas, Ohio, Oklahoma and South Dakota have signed onto the agreement. However, T-Mobile and Sprint still face an ongoing lawsuit from 13 state attorneys general and the District of Columbia seeking to block the deal on anti-competitive grounds.

The merger cannot be finalized until after that case is resolved. The trial is set to begin on Oct. 7, but that date could be pushed back until Dec. 9, given the structural changes to the merger announced today.

The blockbuster tie-up, which was announced more than a year ago, consolidates the nation’s third- and fourth-largest wireless providers and creates a combined company with an enterprise value of roughly $160 billion.

It brings an end to years of negotiations between the companies. Sprint parent SoftBank tried and failed to float a merger with T-Mobile in 2014 due to regulatory concerns, then deal talks fell through again in 2017 after SoftBank expressed doubts about giving up control of Sprint.

The DOJ decision was expected to come out Thursday, but was delayed as the DOJ spoke with states and encouraged them to support the deal, according to The Wall Street Journal.

The deal received comparatively swift approval from the Federal Communications Commission in May after T-Mobile and Sprint agreed to invest in rural broadband development and build new 5G infrastructure.

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