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T-Mobile, Sprint Pull Merger Request From California Regulator

March 31, 2020, 8:37 PM

T-Mobile US Inc. and Sprint Corp. may be preparing to close their merger without approval from the California Public Utilities Commission.

The companies Monday filed a motion to withdraw their application to combine wireline phone businesses in California. Approval is no longer needed because Sprint transitioned its wireline business to a Voice over Internet Protocol, or VoIP service, which isn’t regulated by the state, the companies said.

T-Mobile and Sprint have said they intend to complete their merger by April 1. The California utilities commission is on track to vote on the deal April 16.

“Certainly the maneuvering suggests the companies are preparing to close,” Blair Levin, policy advisor at New Street Research, said in an email.

The companies and the commission didn’t immediately respond to requests for comment. A request to merge their wireless operations is still pending before the commission.

T-Mobile and Sprint have gotten approval from 18 of the 19 state utility commissions that weighed in their proposed merger. California remains the outlier.

The California commission’s approval might not be needed for because the state’s attorney general, Xavier Becerra (D), has already blessed the tie-up, Levin said. Becerra reached a settlement agreement with the companies on March 11 to end the state’s legal challenge.

“Even if it turns out, the companies closed earlier than a court may ultimately believe correct, the end game is the same,” Levin said. “California will approve and the deal will close.”

To contact the reporter on this story: Jon Reid in Washington at jreid@bloomberglaw.com

To contact the editor responsible for this story: John Hughes at jhughes@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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