DOJ Files to Block AT&T’s Purchase of T-Mobile

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According to a Bloomberg report, earlier today the U.S. Department of Justice filed to block AT&T’s US$39 billion acquisition of T-Mobile USA Inc. Their reasons? The DOJ felt the deal would “substantially lessen competition” in the wireless market and would violate U.S. antitrust law.

“AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market,” the DOJ said in its filing.

This isn’t the end-all for the proposed deal, it’s just the initial filing. The courts still need to decide whether or not to allow the merger, but with the DOJ saying they shouldn’t, the future of the merger is in serious jeopardy.

If the court sides with the DOJ, AT&T will be hit with a bill for $3 billion in cash, payable to Deutsche Telekom, the owners of T-Mobile USA. AT&T would also provide T-Mobile with wireless spectrum in some regions and reduced charges for calls into AT&T’s network. The total cost to AT&T if the deal falls through is estimated to be as much as $7 billion.

AT&T shares fell 96 cents to $28.66.

Source: Bloomberg

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About The Author
Joe Levi
Joe graduated from Weber State University with two degrees in Information Systems and Technologies. He has carried mobile devices with him for more than a decade, including Apple's Newton, Microsoft's Handheld and Palm Sized PCs, and is Pocketnow's "Android Guy".By day you'll find Joe coding web pages, tweaking for SEO, and leveraging social media to spread the word. By night you'll probably find him writing technology and "prepping" articles, as well as shooting video. Read more about Joe Levi here.