Sprint falls as its merger with T-Mobile is reportedly likely to blow past a second deadline
- Sprint fell nearly 4% on Thursday after The Wall Street Journal reported merger discussions with T-Mobile have slowed.
- The Justice Department will only allow the deal if both companies give a fourth competitor enough resources to compete in the telecom sector. Dish Network is the current frontrunner to occupy that space.
- Sprint and T-Mobile are planning to extend their merger agreement past its July 29 deadline.
- Watch Sprint trade live here.
Sprint dropped as much as 3.7% Thursday after The Wall Street Journal reported that negotiations to complete the merger of T-Mobile and Sprint hit a snag.
T-Mobile's stock didn't fall as much and was nearly flat. The deal is valued at more than $26 billion.The Justice Department has overseen the negotiations around merging the third- and fourth-biggest cellphone carriers, and has made the deal contingent upon the companies giving up enough assets to form a new competitor. Dish Network is the most likely recipient to get these resources.
The parties have mostly agreed to a deal that would grant prepaid phone customers and spectrum licenses to help Dish get a leg-up as it begins to compete in the phone business.
One issue curtailing the merger is limits on who can own part of the new Dish wireless network, which has resisted potential ownership restrictions, according to the Journal. The deal would also grant Dish a multiyear agreement to use some of the wireless carriers' network as it builds necessary infrastructure, but the parties haven't decided how much traffic Dish can send to the new T-Mobile's network.
T-Mobile and Sprint are reportedly planning to push their merger agreement past its July 29 deadline as they iron out details. The deal was announced more than a year ago and has already had its deadline extended once.
Several state attorneys general sued to block the merger in June and T-Mobile is set to contest to the lawsuit in a trial starting October 7.