Sprint Shares Explode As Merger Deal Likely to Be Approved

Shares of Sprint were up over 60% on Monday in after-hours trading on a WSJ report that a U.S. District judge is set to rule in favor of the company’s deal with T-Mobile.

T-Mobile stock rose over 8% in extended trading on the news. The decision is expected to be made public Tuesday according to the WSJ report.

A Wall Street Journal said that a U.S. District judge is expected to rule in favor of its ruling with T-Mobile.

The article reads “The parties have been notified of the imminent ruling, the people said. It is unclear whether the ruling could require the parties to make additional concessions beyond what they already agreed to offer the federal government. A decision by U.S. District Judge Victor Marrero, after a December trial, would clear the way for a merger of the No. 3 and No. 4 wireless carriers by subscribers. The companies agreed to merge nearly two years ago in an all-stock deal worth $26 billion. They secured approval from federal antitrust and telecommunications officials last year after T-Mobile and Sprint made concessions.”

It further reads, “Both companies have a contractual right to renegotiate their deal terms if the court clears their merger, and executives have discussed that possibility. T-Mobile’s operating chief Mike Sievert, who is slated to take over as chief executive in May, said last week the company doesn’t have an interest in creating a material delay. The new T-Mobile will have more than 90 million U.S. customers and aims to nab more subscribers from AT&T Inc. and Verizon Communications Inc.”

The two companies have been waiting to see if they could move forward with their $26.5 billion merger.

A deal can’t close until the California Public Utilities Commission approves the transaction.

Multiple states had sued to block the deal from happening and have argued that it is anticompetitive and will raise prices for customers.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.