As fears grow that T-Mobile US Inc.’s Sprint Corp. merger will be quashed by regulators, Chief Executive Officer John Legere is leading a personal crusade to rescue the deal.
The CEO, known for his straggly hair, magenta T-shirts and Twitter antics, has made frequent trips to Washington since the proposed combination was announced in April of 2018. And he’s used his social media presence to make his case. In the latest volley, Legere disputed a Wall Street Journal story that said Justice Department staffers voiced doubts about the transaction being approved in its current form.
“The premise of this story,” he tweeted to his 6.2 million followers, “is simply untrue.”
The Journal’s story sent shares of both carriers tumbling on Tuesday as investors fretted that the merger will be scuttled. Sprint plunged 13 percent to $5.25 and T-Mobile fell as much as 6.9 percent to $69. Deutsche Telekom, the German company that controls T-Mobile, fell as much as 2.4 percent in Frankfurt on Wednesday.
The combination would unite the third- and fourth-largest U.S. wireless carriers, sparking fears about the effect on competition. Legere has argued that a merged company would be a stronger rival to Verizon Communications Inc. and AT&T Inc., the nation’s top providers. In online videos, he pitches the benefits of a fifth-generation network — built together with Sprint — saying it could lay the groundwork for real-time translators and even 5G ski goggles.
All that effort may be for naught. Staff attorneys at the Justice Department are leaning against the deal and outlined their concerns to company officials at a meeting in recent weeks, according to three people familiar with the discussions. A final decision hasn’t been made.
Legere also has been accused of trying to curry favor with the Trump administration. He was a frequent guest of the Trump International Hotel while in Washington, with T-Mobile spending a total of nearly $200,000 at the hotel since the Sprint agreement was announced.
“It appears you might be trying to influence the president to get involved in something he really should not be involved in,” Rep. Pramila Jayapal, D-Wash., said last month.
Legere defended the behavior, saying he was a guest of the Trump hotel long before the Sprint deal was in motion. Since then, he’s stayed elsewhere, but he’s remained a fixture in Washington.
He tweeted a video of him running in front of the Washington Monument on Monday.
Behind the scenes, T-Mobile and Sprint are expected to do whatever it takes to seal the deal, people with knowledge of the situation said. The carriers are still operating as if the transaction will be completed by the end of the first half.
Sprint, the smallest major player in the U.S. wireless industry, has argued that a failed merger would leave it weak and ineffectual. But that reasoning “probably isn’t enough to get a merger through that’s anti-competitive,” Fred Campbell, a former chief of the wireless bureau at the FCC, said earlier this year.
The agreement followed years of will-they-won’t-they deliberations between Deutsche Telekom and SoftBank Group Corp., the Japanese owner of Sprint.
Already, state attorneys general have shared doubts about the deal. States investigating the transaction are considering a lawsuit to block the agreement on antitrust grounds, people familiar with the matter said last month. They may act even if the Justice Department approves the proposal, they said.