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AT&T Undecided Whether To Keep Pursing T-Mobile Purchase

December 13, 2011

AT&T Inc. and the Justice Department have decided to cancel their February antitrust trial over the phone company’s proposed purchase of T-Mobile.

U.S. District Judge Ellen Segal Huvelle approved the motion to cancel the trial and set a January 18 hearing about the future of the deal.

The $39 billion deal is under increasing government opposition, and many analysts speculate that the deal will not go through.

“I think the deal as originally conceived is surely undone,” Andrew Gavil, an anti-trust expert at Howard University’s School of Law, told Reuters

“What remains to be seen is whether AT&T and Deutsche Telecom can construct any kind of alternative … It seems like they would have done so by now, however, if there was an alternative that could satisfy the DOJ and still make business sense,” he said.

AT&T said in a statement that it and T-Mobile want to delay the trial “to allow the two companies time to evaluate all options.”

“AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees,” the statement said. “We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”

The Justice Department sued to block the merger on August 31, and the government said that the combination of the number two and number four cellphone companies would reduce competition and drive up prices.

The companies withdrew their application for the Federal Communications Commission (FCC) to approve the deal three weeks ago after the FCC’s chairman came out against the deal.

Both AT&T and T-Mobile said they would seek approval from Huvelle in the scheduled trial of the Justice Department’s case and would file another FCC application later.

The Justice Department said at a hearing on Friday that there was no valid transaction to challenge since the FCC application was pulled and wanted the case dismissed or delayed.

Huvelle said she was concerned that AT&T was “using” the court and wasting taxpayer resources.

She later ordered that by January 12, the companies must file a report “describing the status of their proposed transaction, including discussion of whether they intend to proceed with the transaction” or another transaction and the status of any related FCC proceedings and timetable.

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Source: RedOrbit Staff & Wire Reports



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