Categories Markets, Other Industries

Mammoth T-Mobile deal to buy Sprint may close by the first quarter of 2019

The $26-billion deal of T-Mobile US Inc’s (TMUS) majority owner taking over Sprint Corp (S) in a move to unite the third and fourth largest US telecom firms is likely to close by the first quarter of 2019.

The US Federal Communications Commission (FCC) and the Department of Justice are now examining the deal.

Chief Financial Officer of T-Mobile, Braxton Carter, said that depositions at the DoJ have commenced and would be wrapped up in a few weeks.

Back in April, Deutsche Telekom AG, which owns a majority in T-Mobile, agreed to buy rival Sprint. The deal was then expected to close in the first half of 2019.

Once the deal closes, both companies are of the view that the merged entity would be better places to take on the competition from AT&T (T) and Verizon (VZ).

Back in August, there were reports of the merger facing opposition from a number of quarters. Dish Network (DISH) requested the Federal Communications Commission not to approve the merger, citing that it would be better if T-Mobile and Sprint operated separately. Dish also argued that there wasn’t any sufficient proof that the pros of the partnership — especially the 5G benefits — surpassed the cons. Dish also said the merger could have a negative impact on pricing.

A few reports also suggested that Wells Fargo and Cowen believed the probability of the merger to complete has gone down due to various headwinds such as a potential blockage by the Department of Justice and the Federal Communications Commission; rising government concern/rivalry with China; and the company’s unclear period on 5G investment without government persuade. However, this latest announcement seems to be clearing the air.

 

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