Final Arguments Delivered in Anti-Trust/Merger Case for T-Mobile and Sprint
Is this the beginning of the Justice Department starting to go after companies for antitrust laws?
Lawyers delivered their final arguments in the antitrust fight over the merger of T-Mobile and Sprint as Wall Street grows more nervous about the wireless deal’s fate.
U.S. District Judge Victor Marrero closed the trial in Manhattan by promising to try to render a decision “as soon as possible.” He didn’t offer a public timeline.
Shares of Sprint are trading at a more than 40% discount to the value of T-Mobile’s proposed all-stock deal, which is now worth about $34 billion after steady gains in T-Mobile’s market value. It is the widest gap since the merger of the two cellular providers was struck nearly two years ago.
The discount has doubled in recent months as the companies have tangled in court with a group of state antitrust officials led by California and New York, a sign of growing doubts about the deal.
“The market’s getting more pessimistic,” said Raymond James analyst Ric Prentiss. He said investors are waking up to the risk that “if this deal doesn’t go through, Sprint’s going to go down pretty hard.”
The states argue that combining the country’s third- and fourth-biggest cellphone carriers would hurt consumers. They have maintained their opposition to the deal despite a series of concessions that the Justice Department and the Federal Communications Commission wrested from both companies last year.
T-Mobile head John Legere returned to the courtroom on Wednesday to hear the closing arguments along with Sprint Chairman Marcelo Claure and CEO Michel Combes. New York Attorney General Letitia James and officials from several other states also attended the hearing, which was over four hours. The Justice Department in a court filing last month defended the merger subject to certain conditions but didn’t join as a party in the antitrust trial. The litigation has exposed tensions between the Trump administration’s top antitrust cops and their state-level counterparts.
Speaking Wednesday outside the courthouse before closing arguments began, New York’s Ms. James said she was confident the coalition had proven its case. We shall see by the end of the month.