The $26 billion merger deal between T-Mobile (NASDAQ: TMUS) and Sprint Corp (NYSE: S) has won approval from the U.S. Department of Justice (DOJ). The resulting company would be known as T-Mobile and is expected to have about 90 million customers, making it the third-largest U.S. wireless carrier.
Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said Friday that the department will approve the deal because T-Mobile owner Deutsche Telekom agreed to sell off several Sprint assets to Dish Network in order to create a new nationwide wireless carrier.
Dish will acquire Sprint’s prepaid brands (Virgin Mobile, Boost, and print prepaid) along with their combined 9.3 million customers and Sprint’s 800Mhz wireless spectrum as part of the deal. T-Mobile and Sprint will also make at least 20,000 cell sites and hundreds of retail stores available to Dish.
Additionally, Dish will acquire network agreements that allow it to use T-Mobile’s network for seven years as it rolls out its own 5G network. Dish is expected to pay T-Mobile about $3.6 billion for the spectrum it is acquiring and $1.4 billion for the prepaid businesses.
“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” commented Delrahim.
“Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide. I want to thank our state partners for joining us in this settlement. In crafting this remedy, we are also mindful of the significant commitments T-Mobile, Sprint, and Dish have made to the Federal Communications Commission,” Delrahim added.
T-Mobile expects to close the deal in the second half of 2019. Sprint’s prepaid customers and businesses will immediately move to Dish, as will the nationwide independent retail network and more than 400 employees that support more than 7,500 retail outlets, once the deal is closed.
However, the blocksucer deal still needs approval from the Federal Communications Commission (FCC). The District of Columbia and thirteen state attorney general have also filed a multistate lawsuit to block the merger, arguing that it will lead to less competition and higher prices.
Shares of T-Mobile climbed $83.34 following the announcement, while those of Sprint rose $7.94. Dish Network shares gained as much as 2.5%.
