On Wednesday, April 1, 2020, the merger agreement between T-Mobile US Inc. (T-Mobile) and Sprint Corp. (Sprint) had been finally approved by a US federal court advising the Department of Justice (DoJ) to approve the deal, worth $23 billion. T-Mobile officials claimed that the merger would help the combined company, which will be operating under the T-Mobile name and will trade on the NASDAQ as “TMUS,” to strengthen its position as the No.3 wireless providers in the US.
Previous Legal Challenges
The T-Mobile and Sprint merger deal had been delayed for long as several state attorneys general were opposing the deal believing that the combining of these two telecom companies would violate the competitive market behavior.
Earlier, the DoJ had given its approval to the deal in July 2019 under a condition that the combined wireless company must sell off some of its assets to Dish Network to make the latter the fourth-largest provider in the US telecom industry segment and allow fair competition in markets. Following the further approval from the Federal Communications Commission (FCC) on the deal in October, FCC’s Chairman, Ajit Pai welcomed the decision of the commission and claimed that the merger would support booting the US race for 5G network.
According to a source, the deal would enable T-Mobile and Sprint to join their high-band and low-band spectrum that could allow introducing a faster 5G network in the country. After a series of lawsuits against the merger agreement, a US federal judge approved the deal in February 2020 rejecting the claims made by a group of states that the proposed transaction would violate antitrust laws and raise prices.
Finalized the Deal
The merger deal, which was originally valued at $26 billion in February, has now been approved by the highest authority of the US competitive watchdog. On Wednesday, a federal judge in Washington issued an order to the Justice Department to approve the merger.
The deal was again stuck due to the intervention from the California Public Utilities Commission (CPUC). However, both companies were slightly optimistic when the CPUC issued a proposed decision in March to approve the merger of T-Mobile and Sprint with conditions and the final decision was scheduled to come on April 16.
Under the approval of the deal, T-Mobile and Sprint also had agreed to abide by any provisions set forth by the California commission. Meanwhile, T-Mobile’s long-time Chief Executive, John Legere will be stepping down from his position with effective immediately as part of the deal.
Legere was initially scheduled to leave the company in the last week of April with Mike Sievert, T-Mobile’s president, as his successor. Legere, who helped to launch the company’s notable “Un-carrier” strategy, will be serving on T-Mobile’s board of directors after leaving the position of CEO. Following the announcement of the merger approval, T-Mobile shares rose 2.34% on Wednesday.
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