Share price movement
The stock price of Sprint (S), the fourth-largest US wireless carrier, jumped 4.2% to $6.95 on Thursday after its merger with rival T-Mobile US (TMUS) moved closer to completion. The companies first agreed to merge in 2014 but parted ways due to regulatory obstacles under the Obama administration. Later in April 2018, T-Mobile again proposed a merger offer to Sprint, which is valued at $59 billion (including debt), but the companies are still facing various regulatory issues.
Notably, among the telecom peers, T-Mobile gained the most this year and rose 19.49% as of May 23, while Sprint grew 19.42% in the same period. The top two US telecom carriers Verizon and AT&T also increased 6.9% and 16.32%, respectively, in the year-to-date period as of May 23. However, telecom peer Frontier dropped 25.2% this year.
Yesterday, Pennsylvania’s Public Utility Commission voted three to two to approve the $26.5 billion megamerger. The deal is now awaiting the approval from the Justice Department’s Antitrust Division and two other state commissions, California and Hawaii. According to some recent reports, the staff of the US Justice Department has recommended blocking the T-Mobile-Sprint merger.
The news comes after the Federal Communications Commission (or FCC) on Monday approved the merger in principle after the companies agreed to sell Sprint’s prepaid brand Boost Mobile. The deal has also won approval in other state public utility commissions.