T-Mobile US Inc. (NASDAQ:TMUS) and Sprint Corp (NYSE:S) stocks soared in early market trading Tuesday after The Wall Street Journal reported that US district judge Victor Marrero was expected to rule in favor of the long-anticipated merger between the wireless carriers.
As of 7:35 a.m. EST, shares of Sprint were up 64%, to $7.90, after closing at $4.80 Monday in New York, while T-Mobile was up roughly 9%, to about $91.50.
T-Mobile and Sprint first announced their intention to merge in April 2018. Although the FCC voted to approve the $26.5 billion unification of the U.S.’s third and fourth largest wireless carriers on Oct. 16 2019, a coalition of 13 state attorneys general sued to block it, arguing the proposed merger will lead to lower competition and higher phone prices.
Democratic presidential candidate Senator Elizabeth Warren also took issue with the merger at the time, tweeting: “The @FCC’s final approval of the T-Mobile/Sprint merger officially hands control of nearly 100% of wireless services to 3 corporate giants – strangling competition & harming consumers, workers, & small businesses.”
Proponents of the merger however, see it as a way to create true competition against firms with monopoly powers like Verizon (VZ) and AT&T (T). Both phone giants dominate the fixed line business as well as the mobile phone space.
The new T-Mobile/Sprint entity, dubbed “New T-Mobile”, is going to have around 127 million customers in the U.S. and sit as America’s third-largest carrier.
The ruling announcement, which comes almost two years after the acquisition deal was first announced, is a significant win for T-Mobile and its owner Deutsche Telekom, as well as Sprint’s parent company SoftBank Group Corp.