Two of the United States' largest telecom companies, Bellevue, Washington-based T-Mobile USA Inc. and Overland Park, Kansas-based Sprint Corp., recently announced their decision to merge, a move that would reduce the number of major telecom competitors in the country from four to three.

The announcement made on Sunday raised eyebrows due to potential antitrust concerns. According to lawyers and other antitrust experts following the case, the legal departments at both companies will have plenty of issues to think through, including the deal's potential effect on the U.S. telecom market as well as its possible international implications.

Andre Barlow, a partner at Doyle, Barlow & Mazard focused on antitrust law, said it's likely lawyers on both sides have been busy for a while prepping for the M&A announcement.

“A merger like this, where we're talking Sprint and T-Mobile, requires a lot of advanced planning, because on its face it raises significant antitrust concerns,” Barlow said. 

He said that in-house teams should be brought in as soon as possible in a potential merger situation. Legal should be considering due diligence issues and preparing Hart–Scott–Rodino Act documents and other antitrust filings required in the United States and abroad. Barlow said it also falls on the seller's counsel to ensure that the company doesn't share information that could give the buyer a competitive edge in the market too soon, in case the deal fails.

“[Lawyers] have to prepare all the arguments to get the deal through the regulatory process,” Barlow said. “Not only do you have to work on the competitive analysis, you also have to start working on the efficiencies and synergies that the deal may provide.”

Regardless of how well in-house lawyers have prepped for the merger announcement and subsequent investigations, there's still work to be done, according to Shannon Zollo, a corporate partner at Morse, Barnes-Brown & Pendleton.

Zollo noted that before the deal's announced, in-house lawyers should be designing and distributing nondisclosure agreements and managing and populating a data room, which can store data, and facilitate document exchange and legal transactions.

But even after the deal's disclosed, the data-related work doesn't stop.

“They've signed the merger agreement, now [the companies are in] this review process,” Zollo said. “Lawyers are going to be managing massive amounts of data, schedules and disclosures.” 

The companies' legal teams will also be working to get the deal approved by regulators by persuading them that the merger wouldn't violate antitrust laws.

It's possible that T-Mobile and Sprint argue that they could provide stronger competition against leading providers AT&T and Verizon as one stronger company, versus two smaller ones, said Richard Epstein, a professor and senior lecturer at the University of Chicago Law School.

Epstein said T-Mobile could argue that Sprint is a failing company and convince regulators that without a merger, Sprint would collapse, reducing the number of main players in the industry to three.

T-Mobile already argued earlier this week that the merger would help the United States beat China in the race to 5G innovation, an argument that could win the favor of regulators who blocked an earlier Broadcom Corp. takeover of Qualcomm Inc. for fear of exporting U.S. 5G advances to Asia.

Mark Lemley, a professor at Stanford Law School, said the deal may be more likely to pass muster than AT&T's attempt to purchase T-Mobile in 2011.

“The elephant in the room is the failed AT&T takeover of T-Mobile, which foundered on antitrust challenges,” he said in an email.

“I think the key for Sprint and T-Mobile will be persuading the agencies that this combination will strengthen an upstart challenger and offer real competition to AT&T and Verizon, as opposed to AT&T, which was buying them essentially to prevent their disruptive competition,” he added.