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Another Mega US Merger – That Of T-Mobile And Sprint, Cleared By Court

Another Mega US Merger – That Of T-Mobile And Sprint, Cleared By Court
Tech companies in the United States have spent more than $200 billion on a series of megamergers that has changed the face of the business scenario in the country in the last 18 months.
And the latest such mega merger to get court clearance is the proposed acquisition of Sprint by T-Mobile.  The deal was given the green signal by a federal judge on Tuesday. 
This merger will combine the third and the fourth largest wireless carriers of the US and the resultant new entity will be large enough o take on the market leaders AT&T and Verizon. There will be about 100 million customers for the new entity that would be called T-Mobile.
The deal was challenged by attorneys general from 13 states and the District of Columbia ewhich was rejected by Judge Victor Marrero of United States District Court in Manhattan.
The case against the deal was filed in June last year after the proposed acquisition was approved by the regulators at Department of Justice and the Federal Communications Commission. In the case, the stated argued that the merger would result in a reduction in competition, higher costs of use of cellphones for consumers cause financial problems for consumers in the lower income group.
However the court was not influenced by the arguments. Instead the court praised T-Mobile in its ruling and called it “a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes” while calling its business strategy as being “undeniably successful.”
The two companies - T-Mobile and Sprint, want to complete the merger process by April 1.
The US corporate has recently seen a number of high profile mergers which include AT&T’s bid to buy Time Warner which gave complete control of the CNN, HBO, and the Warner Bros to the phone giant. Further, the majority of Rupert Murdoch’s 21st Century Fox empire was won by the Walt Disney Company after a bitter battle with Comcast which had presented a rival bid. CBS and Viacom were also combined last year by Shari Redstone.
“Today was a huge victory for this merger,” John Legere, the chief executive of T-Mobile, said in a statement on Tuesday shortly after the court order.
“Look out, Dumb and Dumber and Big Cable — we are coming for you … and you haven’t seen anything yet!” said Legere targeting AT&T and Verizon.
The court decision “validates our view that this merger is in the best interests of the U.S. economy and American consumers,” said Marcelo Claure, the executive chairman of Sprint,
The majority of customers of Sprint will be transferred to mobile plans of T-Mobile if the merger actually happens.
The merger has been described as crucial for the future of both the companies, Sprint and T-Mobile has said, arguing that  the deal will give the new company greater leverage to compete in a market that is froth with price wars which has in turn reduced profits and stunted industry growth.

Christopher J. Mitchell

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