AT&T and T-Mobile Buyout Now Officially 'Dead'; Dropped by Both Parties

Discussion in 'Android News' started by dgstorm, Dec 20, 2011.

  1. dgstorm
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    dgstorm Editor in Chief Staff Member Premium Member

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    Here's another follow-up story to previous news. Last night, AT&T announced that they were dropping their bid to purchase T-Mobile from Deutsche Telekom. The two companies had to concede to mounting regulatory pressure. AT&T originally claimed that it was imperative for them to purchase T-Mobile in order to improve their spectrum shortage issues. This was later refuted by a leaked internal document from AT&T's own lawyers. Ultimately massive resistance from several consumer groups, private companies, the FCC and even an anti-competitive lawsuit from the Department of Justice finally forced the two companies to scuttle the deal.

    Previously, we reported that AT&T had withdrawn its FCC application in order to focus on the DoJ lawsuit, but the Judge presiding in that case wasn't to thrilled about AT&T's legal tactics, so things were looking grim. Now, since the deal is officiall dead, T-Mobile will receive a huge, "sorry we couldn't get married" compensation prize, in the form of a $3 Billion cash payout, as well as an agreement that includes a large package of Advanced Wireless Solutions (AWS) spectrum and long-term national UMTS roaming, worth another $1 Billion. This is a record high "break-up" fee.

    Interestingly, even though this deal includes this record level "break up" fee, supposedly, Deutsche Telekom, ends up being the big loser in this deal, and things look worse for them than AT&T. Steve Clement, an analyst at Pacific Crest Securities, said, "It's a bigger blow to Deutsche Telekom in that they were getting a good price for that mobile asset and I don't' think there's an alternative that's nearly as good for them." The report further elaborated that Deutsche Telekom planned to use the proceeds from the sale to pay down debt. Then they were going to launch a 5 billion euro ($6.51 billion)share buyback program, as well as increase investments.

    Clement commented on AT&T's position,

    You can see the full press release, here.

    Source: Yahoo!
    Image Credit: TechCrunch
    Last edited: Dec 20, 2011
  2. jerkwad
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    jerkwad New Member

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    $d4,000,000,000hh! *face palm*