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- Shares of the US telecom provider Sprint are tumbling in premarket trading after a Wall Street Journal report indicated the company’s planned merger with T-Mobile was unlikely in its current form.
- The Department of Justice’s (DOJ) antitrust division has concerns with the deal’s current structure and the potential threat it would cause to competition.
- T-Mobile and Sprint are the the third and fourth largest carriers by subscribers.
- Watch Sprint and T-Mobile trade live.
A planned merger between two of the largest telecom companies in the US has run into trouble after antitrust concerns seemed to scuttle Sprint and T-Mobile’s plans.
Sprint shares were down more than 5% in premarket trading after a report from The Wall Street Journal suggested that Department of Justice antitrust officials had concerns about the current structure of the deal which could present a threat to market competition. T-Mobile shares were down 4.2% as of 7:10 a.m. ET.
The all-stock deal between the US’s third and fourth largest telecom companies by subscribers is under scrutiny for the perceived efficiencies the merged firm would have, The Wall Street Journal says, citing people familiar with the DOJ’s thinking.
While the discussions aren’t necessarily the death knell for a potential merger, its a sign that authorities are wary of the carrier’s deal as they seek to break the dominance of massive rivals Verizon and AT&T.
The deal was announced last April and cleared a major hurdle in December when it was approved by the Committee on Foreign Investment in the US and Team Telecom, two bodies which handle foreign investment into the US, according to the Wall Street Journal.
German company Deutsche Telekom is the majority owner of T-Mobile while Sprint is owned by Japan’s Softbank.
Softbank CEO and Sprint chairman Marcelo Clure claimed the Wall Street Journal’s findings were not accurate in a tweet.
Sprint and T-Mobile did not immediately respond to requests for comment.