Sprint And T-Mobile Finally Get Approval To Merge

The year-long wait for T-Mobile Us Inc TMUS to receive regulatory approval to acquire rival Sprint Corp S ended Friday.

What Happened

T-Mobile proposed to acquire Sprint in April 2018 and the regulatory process has been stick in limbo since then. On Friday, the U.S. Department of Justice offered its stamp of approval to the $26 billion acquisition.

The merger is contingent on the companies selling certain assets, including the prepaid brand Boost Mobile to DISH Network Corp DISH. Sources close to the matter previously told Reuters Dish may also be granted first rights to buy tower leases, which T-Mobile considers redundant when combined with Sprint. Dish would also be able to access T-Mobile's network for seven years.

Sprint's stock was higher by more than 6% at $7.90 after hitting a new 52-week high of $7.93.

T-Mobile's stock was higher by 3.5% at $82.70 after hitting a 52-week high of $83.05.

Shares of Dish gained 1.5% at $39.79.

Why It's Important

Makan Delrahim, the Justice Department's antitrust chief, was quoted by Dow Jones as saying the merger and divestiture of certain assets to Dish will ensure spectrum that is under used or not used at all will be made available to American consumers as part of a "high quality" 5G network nationwide.

Multiple state attorney offices filed a lawsuit in federal court to block the merger. Their actions continue to pose a notable hurdle that still needs to be overcome before a deal can close.

Separately, U.S. Federal Communications Commission Chairman Ajit Pai has already approved the merger in principle and could release a formal order in the coming weeks, according to Reuters. The regulatory body is likely going to give Dish additional time to use the spectrum it already bought to set up its own consumer wireless network.

Dish could face strict penalties if it doesn't proceed with a consumer wireless network within the given time frame.

Related Links:

Reports: Sprint-T Mobile Merger Could Be Approved This Week

Wells Fargo Analyst: T-Mobile-Sprint Tie-Up Could Progress Next Week

Photo credit: Mike Mozart, Flickr