T-Mobile and Sprint have closed their merger, the newly combined companies announced Wednesday.
Why it matters: The deal — initiated nearly two years ago — brings together the nation's No. 3 and No. 4 wireless carriers under the T-Mobile name. Critics have said that the combination will reduce competition, even with concessions the companies made to win Justice Department approval.
Details: The combined entity will use the T-Mobile name and trade under the TMUS ticker. T-Mobile shares were up modestly as markets opened Wednesday.
- T-Mobile CEO John Legere is also ceding his role to COO Mike Sievert a month early, the company said. That transition, originally slated for May 1, is effective immediately.
- Legere, who led a turnaround characterized by aggressive subscriber growth and unconventional service offerings since taking the reins in 2012, will stay on the T-Mobile board through June.
Background: The largest obstacles were removed when T-Mobile reached a deal with the Justice Department and a federal court blocked a legal challenge from a number of states. The companies said in the wake of the court ruling that they aimed to close the deal as soon as April 1.
- As part of the Justice Department deal, T-Mobile agreed to divest certain prepaid assets to Dish Network and to provide network access and other components designed to allow Dish to become a fourth national wireless provider.
- T-Mobile also agreed to various conditions with several states, including agreements to maintain certain rate plans and staffing levels.
- Sprint and T-Mobile were still awaiting formal approval from the California Public Utilities Commission, but on Wednesday they filed paperwork to withdraw part of the application — the wireline business over which the commission has clear jurisdiction. The real competition concerns, though, are over the wireless business, regulation of which is largely done at the federal level.
Of note: A number of banks that had agreed to provide $23 billion in financing (with hopes of offloading some of the risk as debt to investors) are now fully on the hook amid changes in the markets due to the coronavirus.
