Merger between T-Mobile and Sprint unlikely to happen as now structured

T-Mobile CEO John Legere

T-Mobile CEO John Legere says the premise of the Wall Street Journal's story"is simply untrue. Getty Images

Sprint and T-Mobiles argument for the merger is that the two carriers need each other to push forward with 5G and with Sprints accumulating debt, it needs T-Mobile so the carrier doesnt go bankrupt. T-Mobile stock slid nearly 4 percent.

According to The Wall Street Journal, the Department of Justice isn't so keen on the impending merger.

Sprint and T-Mobile shares are falling after a Wall Street Journal report cast doubt on the likelihood of government approval of their $26.5 billion merger.

The Journal said that Justice Department antitrust personnel, who are reviewing the takeover, questioned the companies' reasoning for it in a meeting this month.

Justice Department staffers have told T-Mobile US Inc. and Sprint Corp. that their planned merger is unlikely to be approved as now structured, according to people familiar with the matter, casting doubt on the fate of the $26 billion deal. The FCC also has regulatory oversight of the deal but has not made any waves yet.

Sprint declined to comment. For example, T-Mobile claims that its 5G home internet service is only possible if it merges with Sprint.

The T-Mobile/Sprint deal would reduce the number of nationwide mobile carriers from four to three, limiting customer choice across the United States. But the two carriers are said to remain in talks with government officials and regulators.

To alleviate concerns, it is reported that T-Mobile and Sprint could could offer concessions, such as assets sales.

T-Mobile has defended the proposed merger, saying the combined company would be better and faster at building 5G, the next generation of wireless, to compete with industry leaders AT&T Inc and Verizon Communications Inc. Besides the federal agencies, states are reviewing the merger and could sue to block it even without DOJ help.

The final decision is still several weeks away as per the report.

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