Shares of mobile communications firm Sprint Nextel rose more than 7 percent in trading Wednesday after the Department of Justice sued rival AT&T to stop that company’s merger with T-Mobile. The proposed merger would create the largest mobile phone carrier in the United States.
Shares of AT&T fell by more than 4.5 percent.
Department of Justice officials wrote in a statement Wednesday that the proposed merger would “reduce competition in mobile wireless telecommunications services.”
Officials from AT&T claimed the DOJ had given them “no indication” of the government’s intention to block the merger. AT&T said in a statement that it would fight the allegations and defend its merger proposal.
AT&T had attempted earlier in the day to insulate the merger from criticism by promising to move 5,000 call-center jobs currently located overseas back to the United States if regulators allowed the merger to proceed. In a statement, the company called its plan “the largest commitment by an individual American company to bring jobs back to the U.S. since the economic crisis began in 2008.”
Sprint Nextel’s senior Vice President for Government Affairs, Vonya McCann, said in a statement that the Justice Department’s suit is “a decisive victory for consumers, competition and our country.” She also said the legal action would “preserve American jobs, strengthen the American economy, and encourage innovation.”
Last month the Federal Communications Commission gave itself additional time to review data from AT&T concerning the merger. Bloomberg reported Wednesday morning that Sen. Herb Kohl, the Wisconsin Democrat who chairs the Senate subcommittee which has antitrust jurisdiction, has expressed opposition to the deal.