AT&T Tries to Salvage T-Mobile Deal

During the Thanksgiving week both AT&T, Inc. (NYSE:T) and T-Mobile hinted their merger may be off. This comes after an antitrust suit from the Department of Justice and a hearing on the merger by the FCC. On Thursday, AT&T said it is no longer seeking approval for merger from the FCC. The company then prepared $4 billion to cover the break-up fee with Deutsche Telekom, the parent company of T-Mobile.

Fast forward to today and AT&T is considering an offer to divest a larger portion of assets than it initially thought. The exact size hasn’t been determined but, it is being reported as much as 40% of T-Mobile’s U.S. assets. This is an attempt to address the concerns from the Justice Department which filed an antitrust suit back in August saying the AT&T/T-Mobile deal would “substantially lessen competition.”

This newest proposal could be heard as early as November 30 at the next Justice Department hearing. Many see this as the only remaining option for the merger if AT&T wants to avoid a lengthy legal battle in order to become the country’s top mobile carrier.

AT&T could also wait and see what happens after the next election. If Republicans win, they would have a better shot of getting past antitrust issues since Republicans are more lenient on antitrust laws.

AT&T’s main competitors in the cell phone space are Verizon Communications Inc. (NYSE:VZ) and Sprint Nextel Corp. (NYSE:S).

written by

Kyle Pinder has has over five years trading and research experience in the large cap space. While still in grad school, Kyle trades daily and keep Active Investor up to date with the latest breaking news coming out of Wall Street and Washington.

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