T-Mobile CEO John Legere (pictured) would stay on as chief executive of the newly formed entity, which would continue to be called T-Mobile. | Ted S. Warren/AP Photo T-Mobile, Sprint to merge in new test for corporate mega-deals under Trump

T-Mobile and Sprint announced a deal to merge their two companies Sunday, setting up another test of the Trump administration’s approach to corporate mega-deals.

The agreement to combine the nation's third- and fourth-largest wireless carriers comes after several false starts over the years, including discussions last year that failed to produce a deal. If approved by federal regulators, the merged company would have about 127 million customers, making it competitive with market leaders Verizon and AT&T.


The $26.8 billion deal is structured as an all-stock transaction, and T-Mobile CEO John Legere would stay on as chief executive of the newly formed entity, which would continue to be called T-Mobile. The companies said they expect the transaction to close by the first half of 2019.

It’s unclear how the deal will fare at President Donald Trump's Justice Department and Federal Communications Commission. Under the Obama administration, top officials at both agencies expressed resistance to a merger of the two companies in 2014 due to competition concerns, because it would have eliminated one of the top four U.S. wireless carriers.

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Legere, in a call with reporters, framed the deal as beneficial for the U.S. in the race to build next-generation 5G networks. He said he and Sprint CEO Marcelo Claure called FCC Chairman Ajit Pai on Sunday and will be heading to Washington for more meetings.

"Once regulators see the compelling benefits, they'll agree this is the right move at the right time for consumers and the country," he said.

The DOJ under Trump's hand-picked antitrust chief, Makan Delrahim, has taken a hard line against another major telecom-media merger, suing to block AT&T's $85 billion deal for Time Warner. Closing arguments in that trial are due to take place Monday. Trump, striking a populist tone, has opposed that deal as concentrating too much power in one company, and his frequent bashing of Time Warner-owned CNN over its coverage has hung over the proceedings.

SoftBank CEO Masayoshi Son, whose company owns Sprint, has actively courted Trump since his election victory, pledging at a December 2016 meeting with the then-president-elect to invest $50 billion in the U.S. and create 50,000 new jobs. Trump took credit for the announcement, saying it never would have happened without his White House win. SoftBank is based in Japan, while T-Mobile is controlled by Germany's Deutsche Telekom.

Legere said the combined company expects to add thousands of jobs in the short term, pushing back on skeptics who contend mergers typically lead to job losses. He didn't preclude job cuts but said they would ultimately be offset by new hires.

Executives from the companies also said the GOP tax overhaul would help the merged company better compete in the marketplace.

Trump-appointed FCC Chairman Pai has dropped hints that he may be open to having less than four major wireless carriers. At an event in Washington last year, he said he doesn’t know “in a vacuum, what the optimal market structure of any particular marketplace is — what the right number of competitors should be.”

The FCC under Pai also declared the wireless market a competitive one last year, a regulatory designation that some said at the time could signal a new agency openness to industry consolidation.

Public interest groups were quick to pan the deal as one that could increase prices and hurt consumers.

"Right now, Sprint and T-Mobile provide much-needed alternatives to Verizon and AT&T, with some innovative plans and pricing options that keep some semblance of competition alive," said Jonathan Schwantes, senior policy counsel for Consumers Union. "If you combine these two companies, those incentives and options could dry up, and people could see prices shoot up, not only for monthly service plans, but for equipment prices as well.”

Steven Overly contributed to this report.