US DOJ likely to reject T-Mobile and Sprint merger
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One year after US operators T-Mobile and Sprint finally finished the preliminaries and announced a merger, the proposed deal is under fire. Few ever thought the deal would get through regulators unscathed, but now we’re finally getting to the details.
DOJ has told the two carriers that it is ‘unlikely’ to approve the deal as currently structured, or at least people at the DOJ involved in the approval did, as this doesn’t appear to be a formal thing. The news adds to a growing list of regulatory objections from the states and from the FCC.
T-Mobile CEO John Legere is disputing the reports, and there is certainly sufficient motivation to adjust the deal enough to push it through. However, there is enough doubt right now that the markets didn’t take it well and sent the stock of both companies falling.
Perhaps like AT&T did for the Time Warner deal they will at some point take things to the courts.
Questions & Answers
Q.What is the primary reason for the Department of Justice's likely rejection?
What is the primary reason for the Department of Justice's likely rejection?
The Department of Justice has indicated it is 'unlikely' to approve the deal as it is currently structured. This suggests concerns with the existing terms rather than the merger concept itself.
Q.Besides the DOJ, who else has raised objections to the merger?
Besides the DOJ, who else has raised objections to the merger?
There is a growing list of regulatory objections from various US states and from the Federal Communications Commission (FCC). The DOJ's stance adds to these existing concerns.
Q.How have the companies involved reacted to this news?
How have the companies involved reacted to this news?
T-Mobile CEO John Legere is disputing these reports. The news also caused the stock of both T-Mobile and Sprint to fall in the market.
Q.Could the companies still try to push the merger through despite the objections?
Could the companies still try to push the merger through despite the objections?
Yes, there is certainly sufficient motivation for the companies to adjust the deal enough to secure approval. They might also consider taking the matter to court, similar to the AT&T and Time Warner deal.
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