(Bloomberg) -- T-Mobile US Inc. is set to win U.S. antitrust approval for its takeover of Sprint Corp. on Friday, according to a person familiar with the matter, moving the wireless carriers a step closer to completing a deal that has been more than a year in the making.
The Justice Department’s antitrust division is scheduled to announce a settlement that will require the companies to sell assets to Dish Network Corp. to preserve competition in the industry, said the person, who asked not to be named because the review is confidential.
Under the settlement, Dish would pay about $5 billion for wireless assets, including prepaid mobile businesses and spectrum. The arrangement is intended to resolve competition problems stemming from uniting the No. 3 and No. 4 wireless carriers.
The Justice Department said late Thursday that the head of the antitrust division, Makan Delrahim, will make a “significant merger enforcement action” Friday, without providing further details.
Sprint jumped 4% to $7.74 at 9:49 a.m. in New York while T-Mobile rose 2.4% to $81.85.
The department’s approval gives the carriers a major boost as they push to close their $26.5 billion deal. They are fighting a lawsuit filed in June by a group of state attorneys general that says the merger should be blocked, arguing it will harm competition and raise prices.
FCC Approval
That case will need to be resolved before the companies close. They also need formal approval from the Federal Communications Commission, whose chairman has said he supports the tie-up.
The Justice Department has been talking to state attorneys general not involved in the case and has won support for the arrangement with Dish from some of those states, according to a person familiar with the matter.
The Justice Department settlement would come a day after the carrier gave an upbeat forecast to Wall Street.
In its report, T-Mobile forecast earnings of $12.9 billion to $13.3 billion this year, excluding some items, compared with an upper range of $13.2 billion previously. It also now expects to add more monthly subscribers than projected.
The outlook provides a tailwind to T-Mobile as it tries to clinch the Sprint merger, a deal that’s meant to help it compete with market leaders Verizon Communications Inc. and AT&T Inc.
It postponed a planned conference call after releasing its second-quarter earnings Thursday afternoon. And its shares were little changed on the generally upbeat results, with investors focusing more on the fate of the deal.
Dish Deal
Antitrust approval of the merger hinges on the transaction with Dish. The agreement forged with the satellite-TV provider potentially turns Dish into a new wireless competitor -- and lets the Justice Department argue that competition in the market will be protected.
Investors have bid up shares of both T-Mobile and Sprint in recent months, a sign they expect the merger to go through. T-Mobile is up 26% this year through Thursday’s close, with Sprint climbing 28%.
The Wall Street Journal previously reported that the Justice Department was negotiating with state attorneys general.
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