The U.S. Justice Department has told T-Mobile US Inc and Sprint Corp it has concerns about their proposed $26 billion merger in its current structure, sources familiar with the matter said on Tuesday, although no final decision has been made.
"In a meeting earlier this month, Justice Department staff members laid out their concerns with the all-stock deal and questioned the companies' arguments that the combination would produce important efficiencies for the merged firm", the Journal wrote.
T-Mobile CEO John Legere says the premise of the Wall Street Journal's story "is simply untrue". "Out of respect for the process, we have no further comment". The officials are also reportedly prepared to sue T-Mobile and Sprint if federal officials don't help them to challenge the proposed merger. DOJ spokesman Jeremy Edwards declined to comment on an ongoing investigation. A number of state attorneys general are also reviewing the deal.
The agreement 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. Success isn't guaranteed, a fact the DOJ was reminded of when a US District Court judge allowed AT&T to buy Time Warner despite DOJ opposition.
Messages to T-Mobile, Sprint and DOJ were not immediately answered. There's a possibility that T-Mobile and Sprint will offer concessions to ease the government's worries. Shares of T-Mobile fell 4 percent. T-Mobile stock slid nearly 4 percent.
For the past four years, T-Mobile and Sprint have been trying to merge together.
If you believe T-Mobile, the Sprint merger is completely, 100% necessary for it to field a 5G network that is competitive with Verizon and AT&T.
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