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US Justice Department tells T-Mobile, Sprint it opposes merger: source
[NEW YORK] The US Justice Department has told T-Mobile US Inc and Sprint Corp that it opposes their planned US$26 billion merger in its current form, a source familiar with the matter said on Tuesday, though a final decision has not been made.
Sprint shares fell around 9 per cent after the bell as investors bet the deal would not be completed. Shares of T-Mobile fell 4 per cent.
T-Mobile US chief executive John Legere was in Washington on Tuesday and has meetings later this week at the US Federal Communications Commission, which is also reviewing the deal, two people briefed on the matter said. A government official said it is unclear if the Justice Department wants to kill the deal or is seeking specific concessions.
The deal had been criticised by consumer advocates and some lawmakers because it would reduce the number of national wireless carriers available to consumers from four to three.
T-Mobile had defended the deal, saying the combined company would be better and faster at building 5G, the next generation of wireless, to compete with industry leaders AT&T Inc and Verizon Communications Inc.
Sprint, T-Mobile and the Justice Department did not immediately respond to requests for comment.
To win support for the deal, T-Mobile had said it would not increase prices for three years and has pledged to use some spectrum for wireless broadband in rural areas.
The deal to combine the carriers, struck in April 2018, was approved by both companies' shareholders in October and has received national security clearance, but still needs approval from the Justice Department and FCC. A number of state attorneys general are also reviewing the deal.