T-Mobile & Sprint Shares Jump As Court To Reportedly Rule In Favor Of Merger

The shares of telecommunications carrier T-Mobile Us Inc. TMUS and Sprint Corporation S jumped in the after-hours session on Monday as reports suggested that their nearly two-year-old merger deal is about to get approved.

What Happened

The federal judge presiding the case filed by state attorneys against the merger deal is expected to rule in favor of the telecom carriers on Tuesday, the Wall Street Journal reported late Monday.

The April 2018 deal, if approved, will see the United States's third and fourth-largest carriers merging their network infrastructure, airwaves, physical stores, and workforce.

It will also give a sigh of relief to Japanese holding company Softbank Group Corp. SFTBY, which controls Sprint, as the investment giant faces a string of poor returns on some of its most hyped fundings, including WeWork and Uber Techonologies Inc. UBER.

T-Mobile, the larger of the two, paid $26 billion to Sprint stakeholders in an all-stock deal, to purchase the carrier. The resultant merger will bring T-Mobile closer in competition to the U.S. largest two carriers AT&T Inc. T and Verizon Communications Inc. VZ.

State attorneys had challenged the merger on anti-competitive grounds, saying the deal will mean increased prices for the carriers' customers due to reduced competition.

T-Mobile is said to have promised the same or better prices for at least the next three years for the consumers, according to the Journal.

The companies haven't seen the document of the ruling, and the court could impose additional restrictions or conditions on the merger deal, the Journal noted.

Price Action

T-Mobile shares jumped 7.36% to trade at $90.75 in the after-hours session on Monday. The shares had closed the regular session 1.07% lower at $84.53.

Sprint's shares added a massive 68.54% value at $8.09, after closing 2.64% lower at $4.80.