T-Mobile and Sprint, which have been busy trying to convince the FCC and the Department of Justice to approve their merger, may have another dilemma in lawsuit filed by the attorneys general of 10 states, according to Reuters, which interviewed three sources familiar with the matter.
The lawsuit is reportedly being led by New York state. Sprint’s stock dropped 7 percent and T-Mobile was off 2 percent on the news of the lawsuit. Blair Levin, advisor, New Street Research, wrote that he believes the states will probably prevail in the court case.
“We believe it generally bad news for the deal. That is, the antitrust merits of the deal will now go before a court. Obviously, one’s view of the likely outcome will depend on which Judge is selected to oversee the case, but at this moment, no one should have a high level of confidence in the deal moving forward,” Levin wrote. [The states] have a relatively straightforward case with significant antitrust precedent on their side.”