States Blocking T-Mobile's Deal Would Disrupt U.S. Merger Policy, DOJ Says
States Blocking T-Mobile's Deal Would Disrupt U.S. Merger Policy, DOJ Says
(Bloomberg) -- State officials will “wreak havoc” on U.S. merger enforcement if they diverge from federal regulators and block deals on their own as they’re trying to do with T-Mobile US Inc.’s proposed takeover of Sprint Corp., the Justice Department’s top antitrust official said.
Makan Delrahim, the head of the department’s antitrust division, on Wednesday took a swipe at the state lawsuit trying to stop the merger of the wireless carriers, which was approved by the Justice Department and the Federal Communications Commission last year.
“The scenario that is unfolding here is incompatible with the orderly operation” of antitrust and telecommunications laws, Delrahim said in a speech in Washington. If states can undo a nationwide settlement, “that will wreak havoc on parties’ ability to merge and the government’s ability to settle cases, and cause real uncertainty in the market for mergers and acquisitions.”
Delrahim’s remarks come as a federal judge in New York is considering whether to block the $26.5 billion merger after a two-week trial in December. A group of state attorneys general led by New York and California say the deal will eliminate competition between T-Mobile and Sprint and lead to higher prices.
Their lawsuit marked a rare break with the Justice Department over merger enforcement. The department approved the tie-up on the condition that the carriers sell assets to Dish Network Corp. to set up a new wireless carrier. The states argue that the Dish settlement won’t restore competition in the market.
In his speech, Delrahim said the government’s position isn’t that states don’t have authority to enforce merger laws, but that courts shouldn’t block a deal or approve a settlement that is “incompatible with the relief secured by the federal government.”
To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net
To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Paula Dwyer
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