Dallas-based AT&T Inc. and Bonn, Germany-based Deutshe Telekom, parent company of T-Mobile USA, have temporarily withdrawn their pending applications to the Federal Communications Commission to merge T-Mobile with AT&T.
The companies dropped the applications Nov. 23 to work on defense for litigation from the U.S. Department of Justice, according to a news release. The companies also face private antitrust suits by Overland Park, Kan.-based Sprint Nextel Corp. and Ridgeland, Miss.-based Cellular South Inc.
According to the release, however, the companies will continue to pursue the proposed $39 billion cash-and-stock transaction.
On Aug. 31, the Department of Justice filed suit to block the merger, saying the combination of the nation’s second and fourth largest carriers in terms of subscribers would likely raise prices for consumers and outweigh any benefits that the combined companies could provide.
Last week, FCC Chairman Julius Genachowski opposed the deal, suggesting the FCC send the proposal to an administrative law judge for review and a hearing, according to a report from the
Los Angeles Times.
AT&T could agree to sell off roughly 40 percent of T-Mobile's assets to competitors in order to satisfy complaints, according to the
New York Times.
With the withdrawal, AT&T expects to realize a pretax accounting charge of $4 billion during the fourth quarter to reflect potential break up fees due to Deutshe Telekom were the merger not to receive regulatory approval. If the transaction does not go as planned, AT&T would have to pay fees of at least $3 billion to the German telecommunications company, according to
Springfield Business Journal archives.
As of 9:45 a.m., AT&T (NYSE: T) stock was trading at $28, compared to its 52 week range of $27.20 to $31.94.[[In-content Ad]]
