A report in the Wall Street Journal, said the Justice Department is unlikely to approve a planned $26 billion merger between T-Mobile and Sprint, under its current structure.
Reuters later confirmed the report with one person familiar with the matter, who cautioned that a final decision has not been made.
Shares of Sprint plunged as much as 12% in after-hours trading following the report, while T-Mobile fell more than 4%.
The deal’s greatest regulatory hurdle was that it would combine the third- and fourth-largest wireless providers in the U.S., a market with only two other participants: AT&T and Verizon.
Critics of the merger have argued it would lead to job loss, decreased competition and increased prices for consumers, especially in rural America.
In February, T-Mobile CEO John Legere defended the deal before Congress, asserting that the deal would create jobs and lower prices.
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