T-Mobile (TMUS) and Sprint (S) just hit all-time highs.
In fact, TMUS just hit $a high of $85.22, as Sprint rallied to a high of $8.06 a share.
All after the U.S. Department of Justice announced it reached an agreement on the $26 billion merger between the two companies, which now consolidates the nation’s third and fourth largest wireless providers. As part of the agreement, Sprint will now divest its Boost Mobile, Virgin Mobile, and Sprint prepaid phone businesses.
T-Mobile will also divest some of its wireless spectrum to Dish Network.
Without such agreements, the mergers could “substantially harm competition,” said Makan Delrahim, head of the DOJ’s antitrust division, as quoted by CNBC. “Americans’ access to fast, reliable and affordable wireless connectivity is critically important to our economy and to every American consumer and to their way of life.”
However, there is a small snag before the deal can close.
While T-Mobile and Sprint expect regulators to approve the merger in the third quarter, with the deal closing in the second half of 2019, both companies still face an ongoing lawsuit from 13 state attorneys general. All are attempting to block the deal on anti-competitive grounds.
The merger cannot be finalized until after that case has been resolved.
At the moment, the trial is set for October 7, 2019, but could be pushed back to December 8, 2019, given the DOJ announcement today.
However, at the moment, New York’s Attorney General seems to have serious reservations, according to CNBC. “We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers and innovation,” she says.
While it’s a wait-and-see at this point, many believe the deal should close with no problem.