- With a trial largely complete, Cowen now expects that a federal judge will block the proposed merger of T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S), giving that prospect a 60% likelihood.
- "After watching the witnesses, evidence, and Judge Marrero's questions, we continue to believe the state AGs are likely to prevail," the firm says, adding it's not likely now for the companies to settle.
- A ruling is expected in February.
- The states likely met their burden of showing the merger is anticompetitive by noting the high concentration of the market, Cowen says, and the judge indicated he didn't accept T-Mobile's stance that MVNOs should be considered competitors to AT&T (NYSE:T), Verizon (NYSE:VZ) and the two rivals.
- Meanwhile, Cowen also says it doesn't believe the judge was convinced that Dish Network (NASDAQ:DISH) can replace Sprint as a fourth national competitor; Dish will need to take four years to cover 70% of the U.S. population, and it would be much smaller than Sprint is today for some time.
- One other factor, Cowen says: "Judge Marrero is a Democrat, and this merger battle is highly partisan," noting also that the plaintiffs are led by Democratic attorneys general.