T-Mobile Secures Major Victory in Multistate Lawsuit Challenging Sprint Merger
February 11, 2020
Cleary Gottlieb acted as lead antitrust counsel to T-Mobile in securing a decisive victory in an unprecedented multistate lawsuit filed in the U.S. District Court for the Southern District of New York by a group of state attorneys general in an attempt to block the merger of T-Mobile and Sprint, notwithstanding approved settlements with the FCC and DOJ.
On February 11, 2020, U.S. District Judge Victor Marrero issued a decision allowing the merger to proceed.
The lawsuit, brought by attorneys general for 13 states and the District of Columbia, alleged that the deal would harm competition in the mobile telecommunications market. The original complaint was filed by 10 state attorneys general on June 11, 2019, and grew to include 17 attorneys general, but several states settled before trial. The lawsuit culminated in a two-week trial in December 2019, with closing statements delivered on January 15, 2020. Throughout the trial, the Cleary team presented evidence on behalf of T-Mobile demonstrating that the merger will transform the U.S. telecommunications landscape, increase competition, and result in lower prices and better quality for American consumers. The court found that, while the state attorneys general were entitled to a presumption based on the companies’ market shares, the evidence presented at trial rebutted that presumption and showed that the transaction “would allow the merged company to continue T-Mobile’s undeniably successful business strategy for the foreseeable future.”
Prior to the challenge by the state attorneys general, Cleary was also lead counsel to T-Mobile in securing antitrust clearance from the U.S. Department of Justice, reaching a settlement in July 2019, and advised on approval from the Federal Communications Commission, which was granted in October 2019. Additionally, Cleary provided guidance through numerous state reviews and coordinated with various public utility commissions to gain regulatory approvals.
The February 11 decision helps clear the way for the T-Mobile/Sprint merger to continue moving forward. The combined companies will create the “New T-Mobile” with a combined enterprise value of approximately $146 billion and over 125 million customers.