AT&T’s bid for T-Mobile halted by Justice Department
NEW YORK, NY – MARCH 21: Executives at AT&T attend a news conference where it was announced that AT&T Inc. will be buying its wireless rival T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock on March 21, 2011 in New York City. The deal, which will be scrutinized by U.S. regulators, would create the nation’s largest wireless carrier if approved. The deal would likely result in domestic job cuts. T-Mobile USA employs about 38,000 people while AT&T employs an estimated 267,000 people. (Photo by Spencer Platt/Getty Images)
AT&T’s bid for T-Mobile could be put on hold as it is challenged by the U.S. Justice Department.
AT&T will record one-time costs of $4 billion this quarter to show the risks of losing the $39 billion deal, Bloomberg reported. While both mega-mobile companies withdrew their applications to industry regulator the Federal Communications Commission, they will continue to focus on gaining clearance from the Justice Department. They are now facing an antitrust lawsuit, which was filed in August, CNN Money reported.
Read more at GlobalPost: Sprint sues AT&T to block T-Mobile acquistion
Earlier this week the FCC chairman Julius Genachowski decided the merger didn’t meet the regulator’s standard for approval and began circulating to other commissioners a proposed order to refer the case to an administrative law judge, The New York Times reported. From this it seemed the companies withdrew their applications to keep the FCC from making AT&T and T-Mobile records public about potential effects of the merger, The Times reported.
If the deal were to go through, it would wipe out the United States’ fourth-largest carrier and make AT&T the market’s dominant player by far, CNN Money reported. The last time the FCC called for a merger hearing was in 2002, stopping the merger of DirectTV and EchoStar. Analysts told Reuters the AT&T and T-Mobile deal looks less likely to succeed.
Consumer groups strongly opposed the merger due to increasing unemployment in the US and Americans already struggling to pay their bills.
Read more at GlobalPost: US files antitrust suit to block AT&T takeover of T-Mobile