Judge approves T-Mobile, Sprint merger

12 Feb 2020

T-Mobile US and Sprint are taking the final steps to complete their USD26 billion merger after receiving a favourable decision from Judge Marrero in New York’s Federal Court. The trial, which commenced on 9 December 2019, was prompted by a lawsuit brought by a group of state attorneys general, which argued that the long-running deal will lead to higher prices for consumers. In summing up its decision, the Court stated: ‘T-Mobile has redefined itself over the past decade as a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes. The proposed merger would allow the merged company to continue T-Mobile’s undeniably successful business strategy for the foreseeable future.’ The combination remains subject to certain closing conditions, including possible additional court proceedings, and the satisfactory resolution of outstanding business issues among the parties, but is expected to close by 1 April 2020.

The involvement of satellite TV giant DISH Network – which agreed to buy Sprint’s pre-paid businesses and 800MHz spectrum assets for a total of USD5 billion in July 2019 – is understood to be one of the key motivating factors behind Judge Marrero’s decision. He noted: ‘The Court is persuaded that the presence of DISH as a new entrant will constitute a substantial incentive to competition… DISH is undeniably well-equipped to enter the market by virtue of its large spectrum portfolio, which is worth roughly USD22 billion and rivals Verizon’s in size.’

Back in April 2018 Sprint and T-Mobile US entered into a definitive agreement to merge in an all-stock transaction. They seek to create a company which will be 41.7% owned by T-Mobile’s parent Deutsche Telekom (DT, which would have overall control) and 27.4% owned by SoftBank, with the remaining 30.9% in free float.

United States, Deutsche Telekom (DT), SoftBank Group Corp, Sprint Corporation, T-Mobile US