What happened

Shares of No. 4 wireless carrier Sprint (NYSE:S) have popped today, up by 10% as of 3 p.m. EDT, following reports that the Department of Justice is about to approve the merger now that DISH Network (NASDAQ:DISH) has finalized a deal to acquire divested assets. T-Mobile (NASDAQ:TMUS) stock also gained on the news. 

So what

Last week, CNBC had reported that the DOJ would reach a decision this week, but T-Mobile parent Deutsche Telekom need to approve of the proposed divestiture. Various regulators have long been in talks with T-Mobile and Sprint regarding their proposed merger, requiring various concessions designed to preserve competition in order to sign off on the deal. DISH has emerged as the top suitor for divested assets that include wireless spectrum and Sprint subsidiary Boost Mobile, which focuses on the prepaid market that T-Mobile already dominates.

Marcelo Claure and John Legere next to the T-Mobile and Sprint logos

Sprint Executive Chairman Marcelo Claure and T-Mobile CEO John Legere. Image source: T-Mobile.

Numerous media reports suggest that a deal has now been reached, with DISH expected to pay $5 billion for those assets, down from the previously reported price tag of $6 billion. Approximately $1.5 billion would be for the prepaid mobile business with another $3.5 billion for wireless spectrum. 

Now what

DISH will not be able to sell the assets or give control of the assets to a third-party company for three years, according to Bloomberg. That was a key concern for Deutsche Telekom, which did not want to inadvertently enable a potential competitor if a larger telecommunications company were to subsequently scoop up DISH, as the prepaid subsidiaries operate as mobile virtual network operators (MVNOs) that utilize wholesale capacity on the combined company's network.

Even if the DOJ approves the deal, which could be as soon as tomorrow, T-Mobile and Sprint still have to contend with a multistate lawsuit filed by over a dozen state attorneys general seeking to block the merger, citing likely harm to competition and consumers. That case is set to go to trial in October, but prosecutors have asked to push that timeline back.