AT&T says T-Mobile deal isn't dead, but sets aside $4B break-up fee
AT&T has withdrawn its merger application at the FCC but will still seek approval for the deal in a court case with the DOJ
IDG News Service - AT&T will continue to seek antitrust clearance for its merger with rival T-Mobile USA, it said Thursday. However, to reflect the break-up fee it will have to pay T-Mobile's owner Deutsche Telekom if the deal does not get regulatory approval, AT&T expects to recognize a $4 billion accounting charge in the fourth quarter.
Deutsche Telekom and AT&T have withdrawn the license transfer applications they filed with the U.S. Federal Communications Commission, and will instead concentrate on defending against a lawsuit filed by the U.S. Department of Justice in August to block the deal, AT&T said.
The FCC found AT&T's proposed $39 billion acquisition of T-Mobile USA to be contrary to the public interest, according to a draft order circulated Tuesday. Withdrawing the applications to the FCC now will "facilitate the consideration of all options at the FCC," AT&T said, adding that the companies intended to seek FCC approval for the deal "as soon as practical."
That setback aside, AT&T and Deutsche Telekom haven't given up on the deal eventually getting regulatory approval.
They will now focus their efforts on obtaining antitrust clearance from the Department of Justice, either "through the litigation pending before the United States District Court for the District of Columbia or alternate means," according to the statement, which didn't elaborate on what those means would include.
AT&T plans to recognize a pre-tax charge in the fourth quarter to reflect "the potential break up fees due Deutsche Telekom in the event the transaction does not receive regulatory approval," T-Mobile said. It includes $3 billion in cash and spectrum valued at $1 billion.
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