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T-Mobile-Sprint Merger Is Approved by Justice Dept., Clearing Major Hurdle T-Mobile-Sprint Merger Is Approved by Justice Dept., Clearing Major Hurdle
(32 minutes later)
The Justice Department on Friday approved the merger of T-Mobile and Sprint, the third- and fourth-largest wireless companies in the United States, moving the deal one crucial step closer to completion years after the two carriers first explored joining forces.The Justice Department on Friday approved the merger of T-Mobile and Sprint, the third- and fourth-largest wireless companies in the United States, moving the deal one crucial step closer to completion years after the two carriers first explored joining forces.
Under the terms of the deal, T-Mobile, the larger of the two companies, would pay $26 billion to acquire Sprint, which has struggled in recent years. The combination would reshape the wireless industry and create a formidable rival to AT&T (No. 1 in the United States) and Verizon (No. 2).Under the terms of the deal, T-Mobile, the larger of the two companies, would pay $26 billion to acquire Sprint, which has struggled in recent years. The combination would reshape the wireless industry and create a formidable rival to AT&T (No. 1 in the United States) and Verizon (No. 2).
The merger required the approval of the Justice Department, which enforces antitrust law, and the Federal Communications Commission, which oversees the telecommunications industry. In May, Ajit Pai, the F.C.C. chairman, signaled his support after the companies committed to investing in rural broadband service and the fifth generation of cellular networks, known as 5G.The merger required the approval of the Justice Department, which enforces antitrust law, and the Federal Communications Commission, which oversees the telecommunications industry. In May, Ajit Pai, the F.C.C. chairman, signaled his support after the companies committed to investing in rural broadband service and the fifth generation of cellular networks, known as 5G.
The deal could still hit a snag if the companies fail to overcome a lawsuit brought by several states that are trying to block the transaction. Attorneys general for 13 states say the combination could harm consumers by leaving them with higher cellphone bills.The deal could still hit a snag if the companies fail to overcome a lawsuit brought by several states that are trying to block the transaction. Attorneys general for 13 states say the combination could harm consumers by leaving them with higher cellphone bills.
The Justice Department gave its approval after the two companies overcame a final obstacle by agreeing to sell off parts of their businesses to pay-TV operator Dish to create a potential fourth major player in the wireless industry. The agency also corralled the attorneys general of five states not party to the lawsuit into the agreement.The Justice Department gave its approval after the two companies overcame a final obstacle by agreeing to sell off parts of their businesses to pay-TV operator Dish to create a potential fourth major player in the wireless industry. The agency also corralled the attorneys general of five states not party to the lawsuit into the agreement.
Makan Delrahim, the head of the Justice Department’s antitrust division, said in a statement that under the agreement’s terms, “Dish is in a unique position to succeed.”Makan Delrahim, the head of the Justice Department’s antitrust division, said in a statement that under the agreement’s terms, “Dish is in a unique position to succeed.”
John Legere, the voluble chief executive of T-Mobile, would become the leader of the combined company, which will go under the T-Mobile name. He has been the deal’s pre-eminent pitchman, lobbying legislators and promoting the merger with a former rival to his 6.2 million Twitter followers. T-Mobile’s majority owner, the German telecommunications giant Deutsche Telekom, will own a non-controlling but significant stake in the newly merged business.
T-Mobile and Sprint have made their pledge to build out 5G technology, which brings faster-than-broadband speeds through the air, a centerpiece of their argument for why the merger should be approved. The companies have said they would have a more difficult time making advances in that realm as separate businesses.
In addition to extending reliable internet access to rural areas, 5G is expected to fuel the development of autonomous cars and other moonshot projects. President Trump has argued that it is critical to national security, and has cited its importance in his administration’s crackdown on the Chinese telecommunications giant Huawei.
Mr. Legere, 61, and his counterpart at Sprint, the executive chairman Marcelo Claure, 48, embarked on a lobbying offensive after announcing that they had reached a deal to merge more than a year ago.
Mr. Legere has made numerous visits to the F.C.C. and the Justice Department, documenting his activity on social media. A month after the merger agreement was announced, Mr. Claure was a host of a fund-raiser for Representative Marsha Blackburn, a Tennessee Republican who was running for Senate. Ms. Blackburn, a longtime supporter of the telecommunications industry, was elected to the Senate in November.
Several lawmakers have expressed misgivings over Mr. Legere’s Washington visits, noting the dozens of stays by him and other T-Mobile executives at the Trump International Hotel. The companies have denied doing anything inappropriate to curry favor with federal officials.
This is a developing story. It will be updated.This is a developing story. It will be updated.