AT&T and the U.S. Department of Justice have agreed to ask a judge to stay the DoJ’s antitrust case until January 18, which was granted. The reason both parties came together to agree on this is is because AT&T wishes to discuss the merger with T-Mobile USA’s parent Deutsche Telekom and basically consider if they want to continue proceeding.
“AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees,” said AT&T in a statement. “We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”
“They’ve conceded that this deal is dead and signaled that they are going to try and have additional discussions with the Justice Department to see if there’s any kind of alternative deal they would agree to,” said Andrew Gavil, an antitrust professor at Howard University School of Law in Washington. “At the same time, AT&T will have to be in discussions with Deutsche Telekom about whether they are willing to release them from this deal to discuss another deal.”
If the merger doesn’t happen by September 20, 2011, AT&T would have to pay T-Mobile about $3 billion in cash and compensate with spectrum and other services worth about another $4 billion. “Essentially AT&T is now deciding whether to try to come up with a solution to fix the transaction or to just pay the breakup fee and walk away,’ said Jeffrey Jacobovitz, an antitrust litigator with McCarthy, Sweeney & Harkaway PC in Washington.
Source: BusinessWeek {link no longer active}
