Judge clears major hurdle in T-Mobile's $26.5B Sprint bid

Daniel Fowler
February 12, 2020

In his 173-page decision approving the deal, Judge Marrero on Tuesday cited "evidence of the now confidential and creative strategic partnerships that Dish is planning".

A USA federal judge on Tuesday ruled in favor of the $26 billion merger between wireless carriers T-Mobile and SoftBank Group-owned Sprint, giving the Japanese conglomerate a much-needed boost after a series of investment flops.

Ultimately, Marrero said he wasn't convinced the deal would lead to higher prices or lower quality for the wireless industry, as the states insist.

T-Mobile started making preparations before the trial so that it can use Sprint's 2.5 GHz as soon as possible once the deal closed-which wasn't a sure thing.

T-Mobile and Sprint haven't renewed the merger agreement since it lapsed on November 1.

Sprint Executive Chairman Marcelo Claure: "Judge Marrero's decision validates our view that this merger is in the best interests of the US economy and American consumers".

After the takeover, T-Mobile will become the country's third-largest wireless operator with enough scale to compete with Verizon and AT&T, the analysts said.

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Outgoing T-Mobile boss John Legere had argued that the tie-up was crucial to allow his company to compete with its bigger rivals.

The court decision, which came about six months after the acquisition was approved by the Department of Justice and the Federal Communications Commission, rejected a collective antitrust lawsuit by 13 states including NY and California, as well as the District of Columbia, which demanded an injunction on the transaction.

T-Mobile, which promised not to raise prices for three years, repeated previous arguments that the combined T-Mobile and Sprint will be able to build a better 5G network - a priority for the Trump administration - than either company could alone. In a nutshell, T-Mobile got the approval from the FCC to acquire Sprint for $26 million in October 2019.

Before the deal can actually close, however, the two companies still need the approval of the California Public Utilities Commission (CPUC), which has until July 2020 to vote - and that deadline could be extended.

New York Attorney General Letitia James says an appeal is possible.

Shares in Japan's SoftBank, which owns Sprint, jumped after the announcement. Dish is also required to build a 5G network over the next several years. "We are eager to begin serving Boost customers while aggressively growing the business as a new competitor, bringing lower prices, greater choice and more innovation to consumers". He said Dish's entry into the market would be good for competition.

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