OVERLAND PARK, KS (KCTV) — New reports are casting doubts that a proposed merger between Overland Park-based Sprint and T-Mobile will pass Department of Justice scrutiny.
The Wall Street Journal reported Tuesday afternoon that the current structure of the $26 billion all-stock deal would not pass ant-trust hurdles set by the DOJ.
The news of the potential block of the merger sent Sprint’s stock down nearly 10% in after-hours trading after being up 2% for the day.
T-Mobile's stock was down about 4%, prompting CEO John Legere to say the "premise of this story, as summarized in the first paragraph, is simply untrue," before adding he had no other comment.
In addition to the challenges federal officials are having with the joining of the two telecom companies, a number of state antitrust officials have expressed concerns with the deal.
On top of the antitrust issues, the Federal Communications Commission has questioned claims by the companies that the merger would result in lower prices for customers for wireless mobile and home broadband services.
Word of the merger has been met with mixed reviews. While supporters say it will help move the US to a faster deployment of 5G technology, many communications unions have cited the expected loss of jobs, estimated to be near 28,000, as a large issue with the deal.
The proposed new company would still trail industry leaders Verizon and AT&T in total subscribers. Those companies are also racing to spread 5G services around the country.
Sprint has already been making a number of moves ahead of the possible merger, including the sale of their Overland Park campus.