A group of 10 state attorneys general plan to sue T-Mobile US Inc. and Sprint Corp. to block their merger, according to people familiar with the matter, adding another complication to an already unusual antitrust review.
The state officials plan to announce their lawsuit at the office of New York Attorney General Letitia James in a news conference scheduled for 2 p.m., one of the people said, adding that the states plan to file their suit in the U.S. District Court for the Southern District of New York.
The pre-emptive attack comes as their federal counterparts at the Justice Department continue to review the $26 billion wireless merger, which would combine the third- and fourth-largest cellphone carriers by subscribers.
State competition enforcers often coordinate their efforts with the Justice Department, though T-Mobile’s bid to buy Sprint hasn’t taken a typical path since the deal was announced a year ago.
Related Reading
- Heard on the Street: Sprint and T-Mobile Still Face Their Toughest Hurdle (June 10)
- Sprint’s Deal Is Still a Marathon (May 21)
- T-Mobile, Sprint Get Merger Backing From FCC Chairman (May 20)
- T-Mobile-Sprint Deal Runs Into Resistance From DOJ Antitrust Staff (April 16)
- T-Mobile Agrees to Buy Sprint in $26 Billion Deal (April 29, 2018)
The companies last month won a major federal approval when Federal Communications Commission Chairman Ajit Paiunilaterally threw his support behind the deal in exchange for the companies’ commitment to invest in 5G infrastructure covering rural areas. The companies also promised to divest Sprint’s Boost Mobile prepaid cellphone service.
The Justice Department has yet to publicly comment on that divestiture package and negotiations are continuing. In April, prior to the FCC’s approval, Justice Department antitrust enforcement staff told the two companies that their planned merger was unlikely to be approved as originally structured, the Journal reported at the time.
Shares of both companies fell after news of the possible lawsuit, with Sprint down 6.87% at $6.51 and T-Mobile giving back gains and trading 1.84% lower at $75.26 per share.
Representatives for T-Mobile and Sprint didn’t immediately respond to requests for comment. News of the state action was first reported by Reuters.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Brent Kendall at brent.kendall@wsj.com
https://www.wsj.com/articles/state-attorneys-general-seek-to-block-t-mobile-sprint-merger-11560265380
2019-06-11 16:27:00Z
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