US to signal approval of $26.5bn T-Mobile US and Sprint merger
Backing of Federal Communications Commission chief after concessions from firms
T-Mobile rose almost 5% to $79.05 after the news. Photograph: Shannon Stapleton/Reuters
Shares T-Mobile US and Sprint jumped as US Federal Communications Commission (FCC) chairman Ajit Pai said he would recommend approval of their $26.5 billion merger, after the companies made commitments including asset sales and rural-service guarantees.
The promises include the sale of Sprint’s Boost prepaid brand, a three-year buildout of an advanced 5G network, and a pledge not to raise prices while the network is being built.
Sprint shares surged 23 per cent to $7.59 after rising as much as 28 per cent while T-Mobile rose almost 5 per cent to $79.05.
“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity,” said Mr Pai on Monday. “The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.”
The deal needs votes from at least three commissioners on the five-member FCC, where Mr Pai leads the Republican majority. He said he would prepare an order “in coming weeks”.
Jessica Rosenworcel, the agency’s senior Democrat, in a tweet said she has “serious doubts” about further consolidation in the wireless industry.
The justice department’s antitrust division, which is also examining the deal, has not indicated whether the concessions will be enough to pass muster. The department declined to comment. State attorneys general are also investigating. – Bloomberg