WASHINGTON – T-Mobile U.S. Inc. won U.S. antitrust approval for its $26 billion takeover of rival Sprint Corp., the Justice Department said Friday, clearing a major hurdle to a deal that merges the nation’s third and fourth largest wireless carriers.
The companies have agreed to divest Sprint’s prepaid businesses, including Boost Mobile, to satellite television firm Dish Network Corp. to create a fourth U.S. wireless carrier.
The Justice Department indicated the deal would improve competition and the rollout of faster 5G networks by combining weaker players and creating a strong, new No. 4, in Dish, that has unused spectrum, which can be activated. Critics, including some state attorneys general, say competition won’t increase and prices for mobile phone plans will rise.
The deal is a clear success for T-Mobile CEO John Legere, who will be the CEO of the combined company and who pushed back at critics arguing a more concentrated market would lead to higher prices.
“It’s a bit dumbfounding to think that we’ve decided to go and build this network and go through this merger so that we can become the basic, lazy, fat, dumb and arrogant players that we were born to teach how to behave,” he told analysts in a conference call.
Assistant Attorney General Makan Delrahim, head of the Justice Department’s antitrust division, said the deal would hasten the development of 5G, the next generation of wireless.
Shares of T-Mobile, which is about 63% owned by Deutsche Telekom AG, were up 5.3% at $84.17. Shares of Sprint, which is about 84% owned by Softbank Group Corp., rose 7.1% to $7.97. Dish was up 0.7% at $39.44.
But the deal still faces a significant challenge: A group of U.S. state attorneys general, including from New York and California, have sued to block the merger on antitrust grounds, arguing the proposed deal would cost consumers more than $4.5 billion annually.