Investing.com – T-Mobile and Sprint tumbled on Tuesday, as the proposed merger between the two wireless companies suffered a setback amid reports that at least 10 US attorneys general are suing to stop the merger.
Sprint (NYSE:) shares slumped 6.1% while T-Mobile US (NASDAQ:) slipped 1.9%.
The suit against the proposed merger of the third and fourth largest wireless companies was filed on grounds that a tie-up would “deprive consumers of the benefits of competition and drive up prices for cellphone services.” The suit was filed in the U.S. District Court for the Southern (NYSE:) District of New York.
Sprint and T-Mobile agreed to team up in April last year in a deal worth $26 billion.
The prospect of a successful merger between the two wireless giants received a boost in May after Federal Commission Chairman Ajit Pai backed the deal, claiming it would prove beneficial to consumers.
But many remained wary that approval from the Justice Department, which reportedly told the two companies in April that their merger was unlikely to be approved as structured, may prove a step too far.
Department of Justice antitrust chief Makan Delrahim and FCC chairman Pai met Friday to discuss the deal, with a decision expected as soon as the end of the week.
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