The merger between Sprint and T-Mobile is unlikely to be approved by anti-trust regulators, at least in its current form. The Wall Street Journal reports that Justice Department officials have informed T-Mobile and Sprint of the merger’s fate.
The report explains that antitrust officials are skeptical of the argument from T-Mobile and Sprint that the merger would “produce important efficiencies.” The merger is currently structured as an all-stock deal.
The nation’s third- and fourth-biggest carriers by subscribers are facing challenges on several fronts, but their most immediate hurdle comes from the Justice Department’s antitrust division, which is considering whether the deal would present an unacceptable threat to competition.
In a meeting earlier this month, Justice Department staff members laid out their concerns with the all-stock deal and questioned the companies’ arguments that the combination would produce important efficiencies for the merged firm, the people said.
Furthermore, state attorneys general are also reviewing the deal and have expressed concerns similar to the Justice Department. Some are also prepared to sue the companies independently if federal officials don’t challenge the merger.
Lastly, the Federal Communications Commission is also seeking more information about the deal:
Public filings show the Federal Communications Commission also prodding the companies for more data about several elements of their proposed combination, including the calculated cost savings and how they would use wireless infrastructure to provide home broadband service.
John Legere has promised that “New T-Mobile” prices will be the same or better as current Sprint and T-Mobile prices for at least 3 years. The two carriers have also touted the 5G benefits that a merger would create.
A final decision from the Justice Department is likely still several weeks away, according to today’s report. T-Mobile and Sprint are still said to be in conversation with government officials, with T-Mobile prepared to offer concessions such as assets sales.