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T-Mobile, MetroPCS Merger Gets Final Federal Approval

Bellevue, Wash. – The proposed merger of T-Mobile and regional no-contract carrier MetroPCS received its final U.S. government approval, clearing the way for an April 12 vote by MetroPCS stockholders.

The proposed merger cleared the U.S. Department of Justice and the Federal Communications Commission. Two groups of stockholders owning a minority of MetroPCS shares, however, oppose the merger. They are MetroPCS’s biggest shareholder, hedge fund Paulson & Co., which owns 9.9 percent of the company, and hedge fund P. Schoenfeld. Combined, they own about 12 percent of the company’s shares.

The final federal sign-off came from the Committee on Foreign Investment, which the two companies said “has determined that there are no unresolved national security concerns with respect to the transaction and that it has therefore concluded its review.”

The merged company would be 74 percent owned by Deutsche Telekom, which owns T-Mobile. MetroPCS shareholders would receive $1.5 billion in cash and 26 percent ownership in the combined company.

The merger is promoted as delivering the scale, spectrum and financial resources to expand geographic coverage, offer an improved selection of handsets and services, and compete aggressively with the nation’s larger carriers.

T-Mobile is the nation’s fourth largest carrier by subscribers, and MetroPCS is the nation’s fifth largest carrier, operating a network in only 14 major metropolitan areas, though its subscribers can roam at no extra cost in markets with a population of 280 million people.

 With the merger, the combined company would still be ranked fourth in subscriber count. The combined company would have projected 2012 pro forma revenue of $24.8 billion and 42.5 million subscribers.