US authorities have approved Deutsche Telekom's proposal to merge its T-Mobile USA unit with MetroPCS Communications.
The US Federal Communications Commission (FCC) approved the Deutsche Telekom, which will hold 74% stake in the combined company, while MetroPCS shareholders will own the remainder and receive a special dividend of about $1.5bn between them.
FCC Chairman Julius Genachowski said the approval would strengthen America's mobile market. He said: "We are seeing billions more in network investment, while the courts have upheld key FCC decisions to accelerate broadband build-out promote competition, and benefit consumers, including our broadband data roaming and pole attachment rules.
"Mobile broadband is a key engine of economic growth, with US annual wireless capital investment up 40% over the last four years, the largest increase in the world, and few sectors having more potential to create jobs."
P. Schoenfeld Asset Management, which had a 1.66% stake in MetroPCS on 31 December last year, however, has launched a proxy battle against the merger.
Paulson & Co, which owns 9.9% of MetroPCS stock, is also opposing the deal, saying the combined firm will have too much debt.
MetroPCS sent a letter to its shareholders saying the deal is the best strategic alternative and urged them to approve it.
Comments may be moderated for spam, obscenities or defamation.