“The Justice Department is blocking AT&T’s $39 billion deal to buy T-Mobile USA, saying the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and raise prices. That’s according to a person familiar with the matter,” The Associated Press reports. “AT&T could challenge the Justice Department’s action in court.”
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Tom Schoenberg reports for Bloomberg, “The U.S. government sued to block AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would ‘substantially lessen competition’ in the wireless market. AT&T shares fell as much as 5 percent.”
“In the complaint filed today in federal court in Washington, the U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law,” Schoenberg reports. “The U.S. also asked for a court order blocking any arrangement implementing the deal.”
Schoenberg reports, “Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month… ‘Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight,’ said Andrew Gavil, a law professor at Howard University in Washington. ‘The fact that the Justice Department is challenging the deal doesn’t mean they won’t negotiate a resolution at some point.'”
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[Thanks to MacDailyNews Readers “Manny S.” and “David M.” for the heads up.]
