T-Mobile/Sprint Merger Is In Danger of Being Rejected By DOJ (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: T-Mobile U.S. and Sprint are facing potential rejection of their proposed merger at the U.S. Department of Justice. DOJ staffers "have told T-Mobile US and Sprint that their planned merger is unlikely to be approved as currently structured," The Wall Street Journal reported today, citing people familiar with the matter. "In a meeting earlier this month, Justice Department staff members laid out their concerns with the all-stock deal and questioned the companies' arguments that the combination would produce important efficiencies for the merged firm," the Journal wrote. DOJ staffers' recommendations aren't the final word at the agency. The department's antitrust chief, Makan Delrahim, would decide whether to challenge or allow the merger.

The Justice Department's antitrust division is reviewing the merger and could file a lawsuit in federal court in an attempt to block the deal. Success isn't guaranteed, a fact the DOJ was reminded of when a U.S. District Court judge allowed AT&T to buy Time Warner despite DOJ opposition. The DOJ could also approve the merger with conditions, but that would require agreement with T-Mobile and Sprint on what those conditions would be. "T-Mobile and Sprint could offer concessions, such as assets sales, to address the government's concerns," the Journal wrote. Sprint shares "are trading at a roughly 20 percent discount to the price implied by the all-stock deal, signaling Wall Street doubts about the combination's chances," the report also said. T-Mobile CEO John Legere denied the report in a tweet, saying that "[t]he premise of this story... is simply untrue. Out of respect for the process, we have no further comment." Sprint Executive Chairman Marcelo Claure also claimed that the "article is not accurate," adding that Sprint "continue[s] to have discussions with regulators about our proposed merger."

Comments

Why this one?

[Daetrin]

AT&T merging with Time-Warner is fine, Disney and Fox merging is fine, but T-Mobile and Sprint is going too far?

I'm all well and good with the DOJ exercising its functions in general, but maybe they should have started exercising them a little earlier?

Re:Why this one?

[jonwil]

The DOJ actually blocked the AT&T/Warner merger but were overruled by the courts.

They must not have followed proper procedures

[Bohnanza]

These Citizens United must not have distributed enough Free Speech.

Re:Equal consideration under the law?

[rmdingler]

Combined, Sprint and T-Mobile will still only be the third largest carrier in the US behind Verizon and AT&T, hardly monopoly territory.

It seems more likely they haven't greased the right wheels in Washington.

Re:Equal consideration under the law?

[squiggleslash]

Stopping the merger has nothing to do with preventing monopolies, in fact the reverse is true.

If the Sprint-T Mobile merger goes ahead, there will be three large mobile carriers able to compete with one another.

If it doesn't, there will be two large mobile carriers and one smaller carrier. (Sprint is pretty much dead at this point, it's not shown a yearly profit in over a decade, the mobile portion hasn't, to the best of my knowledge, ever been profitable.)

Two carriers dominating the industry is far more monopolistic than three.