The judge in a contentious lawsuit that tried to stop the long-in-the-works merger between T-Mobile and Sprint is planning to rule in favor of the deal, according to three people briefed on the matter.
The verdict, expected Tuesday, will come at the end of an unusual suit filed in June by attorneys general from 13 states and the District of Columbia. The challenge came after federal regulators gave their blessing to the deal, which would combine the nation’s third- and fourth-largest wireless carriers and create a new telecommunications giant to take on the two largest, AT&T and Verizon. The states argued that the combination of T-Mobile and Sprint would reduce competition in the telecommunications industry, lead to higher cellphone bills and place a financial burden on lower-income customers.
Judge Victor Marrero of United States District Court in Manhattan presided over the case. Final arguments took place last month.
None of the parties have read the ruling yet, the three people said, leaving open the possibility that the decision includes conditions or restrictions. Both companies are planning to make announcements on Tuesday, the people said. Shares in Sprint shot up more than 60 percent and T-Mobile stock rose about 10 percent in aftermarket trading.
The lawsuit was the final roadblock to the merger, which made steady progress through the approval process since it was announced in April 2018. If the judge’s ruling goes in favor of the two companies, the deal will create a new telecommunications giant, called T-Mobile, that will have more than 100 million customers.
T-Mobile and Sprint have long said the merger was crucial to their futures in an industry challenged by pricing wars that have undercut profits and stalled growth. By combining with Sprint, T-Mobile has said it would be able to accelerate its development of 5G, the next generation of cellular networks.
The deal is also important to Sprint, which has bled cash and subscribers in recent years. SoftBank, the Japanese conglomerate the controls Sprint, has been looking to raise cash for its newest tech investing fund.
The new company will be led by Mike Sievert, a T-Mobile executive who will take over for John Legere, the face of the company whose contract is up in April.
Mr. Legere, the flamboyant, social-media-savvy chief executive of T-Mobile since 2012, helped drive the merger, which won the approval of the Justice Department and the Federal Communications Commission last year. To get the nod from the government, T-Mobile and Sprint agreed to sell off significant portions of their businesses to the pay-television operator Dish Network as part of a plan to create a potential new major wireless company.
Marcelo Claure, the executive chairman of Sprint, became a close ally of Mr. Legere’s throughout the campaign to secure approval for the deal. Mr. Legere made numerous visits to both the Federal Communications Commission and the Justice Department. Mr. Claure hosted a fund-raiser for Representative Marsha Blackburn, a Tennessee Republican who was eventually elected to the Senate in November 2018.
Several lawmakers expressed misgivings over Mr. Legere’s Washington visits, noting the dozens of times that he and other T-Mobile executives stayed at the Trump International Hotel there. The companies have denied doing anything inappropriate to curry favor with federal officials.
The deal also represents a victory for Masayoshi Son, the billionaire entrepreneur and outspoken leader of SoftBank, which has recently come under pressure from the activist investor Elliott Management. SoftBank’s outsize investments in tech start-ups, including WeWork, have failed to deliver for investors, and Mr. Son has struggled to raise more cash for a new investment fund. He has been trying to unload Sprint for years.