Earlier today, the FCC officially recommended the approval of the $26.5 billion proposed merger between T-Mobile (TMUS) and Sprint (S). The chairman of the FCC, Ajit Pai, shared a draft order with other FCC commissioners, who will vote on the deal. According to CNBC, the draft order still requires the approval of the “two of the other four FCC commissioners.”
Bloomberg reported that Bloomberg Intelligence analyst Matthew Schettenhelm stated in a note, “The Democrats can delay a vote until Sept. 25, but may agree to move ahead before then.” The proposal would allow T-Mobile and Sprint to combine and divest certain assets to Dish Network.
FCC approved T-Mobile and Sprint merger
Pai noted in today’s statement, “After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas. Moreover, with the conditions included in this draft Order, the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market.”
In response to Pai’s announcement of support of the merger, FCC Commissioner Jessica Rosenworcel tweeted, “I am not convinced that removing a competitor will lead to better outcomes for consumers.”
T-Mobile’s CEO, John Legere, tweeted that the order was “another milestone toward bringing #NewTMobile and #5GForAll to life for US consumers!”
DOJ approved merger
Last month, the Department of Justice approved the T-Mobile and Sprint merger on the condition that the companies would divest certain wireless assets to Dish. The DOJ called the FCC’s order an “important milestone.” DOJ’s Assistant Attorney General Makan Delrahim added, “We are now one step closer to strengthening competition for high-quality 5G networks that will benefit American consumers nationwide.”
T-Mobile and Sprint merger lawsuit
The states’ litigation alleges that the merger could reduce competition, increase prices for consumers, and harm jobs. The states also argued that the deal would cost their consumers about $4.5 billion annually.
The antitrust trial is set to begin on December 9. Notably, the T-Mobile and Sprint merger transaction might not close until the states’ litigation concludes.
On August 14, T-Mobile closed at $76.93, which was 0.89% lower than its previous closing price. Sprint stock fell 0.15% and closed at $6.79 on the same day.