Please ensure Javascript is enabled for purposes of website accessibility

Federal Judge Approves Sprint Merger With T-Mobile

By James Brumley - Updated Feb 11, 2020 at 12:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The multistate lawsuit was one of the last things that could have blocked the third- and fourth-largest telecoms in the U.S. wireless business from teaming up.

After a years-long slog, wireless telecom T-Mobile (TMUS -2.63%) is one big step closer to being allowed to merge with rival Sprint (S) to form a service provider that can better compete with industry giants AT&T and Verizon. U.S. District Court Judge Victor Marrero on Tuesday ruled against a group of state attorneys general, who argued that the deal would reduce competition and potentially increase prices for consumers.

Graphic of rising arrow being pushed together by two businessmen.

Image Source: Getty Images.

The proposed merger has been in play since 2014, but has been stymied multiple times for reasons including regulatory roadblocks and disagreements about what the combined company would look like. 

Those efforts ultimately proved fruitful, however. The Department of Justice approved the pairing, with certain conditions, in July of last year. The FCC gave the two companies its green light in November, but also imposed conditions that dovetailed with the DOJ's stipulations. Namely, the two agencies have mandated that Sprint's Boost Mobile service and other prepaid service businesses be sold to satellite TV company Dish Network (DISH -2.84%) and that Dish must be allowed to access enough of T-Mobile's network that it has a viable chance of becoming a major wireless provider in its own right.

The court case was the last of the major legal hurdles the two companies needed to clear, although minor ones remain. The California Public Utilities Commission must also approve the deal before any merger can be finalized, and another federal judge must approve Dish's new role using Sprint's and T-Mobile's assets. Neither of those are viewed as likely impediments.

The deal values Sprint at around $26.5 billion, to be paid entirely with T-Mobile stock.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sprint Corporation Stock Quote
Sprint Corporation
S
T-Mobile US, Inc. Stock Quote
T-Mobile US, Inc.
TMUS
$125.24 (-2.63%) $-3.38
DISH Network Corporation Stock Quote
DISH Network Corporation
DISH
$20.89 (-2.84%) $0.61

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.