A US judge has ruled in favor of a proposed T-Mobile US takeover of its smaller rival Sprint for $26 billion, which was agreed upon two years ago.
The federal judge rejected a claim by a group of Democrat-led states that the planned takeover by telecoms giant T-Mobile US of Sprint would break anti-competition laws and result to higher prices for customers.
The $26 billion deal, first agreed upon two years ago, may now be completed by the companies if left unchallenged. The takeover would mean that the US will have only three major networks in the mobile phone market, namely Verizon, AT&T, and the new T-Mobile.
Outgoing T-Mobile chief executive officer (CEO) John Legere had argued that the merger is crucial for the telecoms company to compete with its bigger rivals. In a tweet celebrating the favorable ruling, Legere said the deal would be good for the company, its employees, and customers.
Legere will step down as CEO of T-Mobile on May 1st, 2020 and will be succeeded by Mike Sievert, T-Mobile’s current president and chief operating officer.
It had previously been rumored that Sievert would take over the position after the closing of T-Mobile’s merger with Sprint as his contract allows him to leave if he does not become T-Mobile CEO within six months of the merger closing
Following reports of the ruling in favor of the deal, shares in Sprint went up by almost 80% or about $15 billion in New York while shares in Sprint-owner SoftBank surged by over 12% on Wednesday when the Tokyo stock market reopened after the National Founding Day holiday.
The takeover by T-Mobile would allow the Japanese technology company to offload one of its troubled assets as it struggles to raise funds for a successor to its $100 billion Vision Fund.
It comes as founder Masayoshi Son faces pressure over some of his high-profile investments, including troubled office space company WeWork.
