The Federal Communications Commission has approved the merger of T-Mobile USA and Dallas-based MetroPCS Communications. (Photo by Andrew Burton/Getty Images)
The Federal Communications Commission has approved the merger of T-Mobile USA and Dallas-based MetroPCS Communications.
The Tuesday decision comes after the Justice Department last week cleared the merger of the No. 4 and No. 5 cellphone carriers in the country.
That means the last hurdle will be a vote by MetroPCS shareholders, who convene in a month. Regulatory approval of the deal was expected. The FCC applied no significant conditions to its approval.
Under the deal, T-Mobile USA's German parent Deutsche Telekom will hold a 74 percent stake in the combined company, while MetroPCS shareholders will own the rest. MetroPCS shareholders will also receive a special dividend totaling about $1.5 billion.
But MetroPCS' largest shareholder, billionaire John Paulson, opposes the deal. He believes it would saddle the company with too much debt and has said that Deutsche Telekom is getting a better deal than MetroPCS's shareholders.
On Tuesday, MetroPCS mailed a letter to shareholders defending the deal, saying it's the best strategic alternative for shareholders and the stake in the combined company is worth substantially more than the standalone company.
Last year, regulators blocked the proposed acquisition of T-Mobile USA by Dallas-based AT&T, the nation's No. 2 wireless company. They said it would have reduced competition in the industry. Regulators likely reasoned that the merger of two smaller players was less of a threat, particularly since both companies are losing subscribers. Together, they may be able to compete more effectively with larger companies.