T-Mobile and Sprint to receive formal approval from the U.S district court on Tuesday

T-Mobile and Sprint have been seeking formal approval from the U.S district court before the two wireless carriers can merge to form a bigger competitor for the likes of AT&T and Verizon. The states had previously filed against the acquisition citing market imbalance. According to the sources, however, a U.S judge is soon to announce the final verdict in favor of the merger.

The news had a solid impact on the stock market with T-mobile climbing 8% in the after-hours trading on Monday while Sprint printing a massive 69% gain in extended trading. Judge Victor Marrero is likely to announce the decision later on Tuesday.

States Expressed Concern Of Higher Prices For Consumers Following The Merger

Under the lead of New York and California, state attorneys general had previously argued that a merger between two of the top four U.S wireless carriers will translate into higher prices for consumers specifically the ones who use prepaid packages. Approval for the merger will be construed as a major defeat for the states, as per the analysts.

T-Mobile and Sprint have already received approval from the federal regulators. Both the carriers have reiterated on multiple occasions that the merger is a necessity to build the next-generation 5G network while competing well against the market giants like AT&T and Verizon.

The sources also informed that renegotiations between the two companies regarding the specifics of the merger deal valued at $26.5 billion are to begin in the upcoming days. Deutsche Telekom, the parent company of T-Mobile, is now interested in reducing the deal value arguing that Sprint’s assets are now worth significantly less as compared to when the agreement was originally signed.

Sprint Sees Merger A Necessity For T-Mobile To Expand Its Cash Flow

Sprint, on the other hand, will hold its stance with a counter-argument that T-Mobile is expected to face increasingly greater challenges in expanding its cashflow if it doesn’t merge with Sprint. The acquisition, as per Sprint, will make its spectrum accessible to T-Mobile that help improve its capacity.

The sources, however, highlighted that it can’t be said with certainty if a renegotiated deal will indeed be signed between the two parties.

An official word from the two companies or the U.S court of Law has not yet been received on the recent developments.

T-Mobile is currently settled at $90.75 in the stock market while Sprint surged to $8.30 per share in extended trading on Monday.