AfterDawn: News

If regulators do not approve acquisition, AT&T owes T-Mobile $6 billion

AT&T has confirmed a record break-up fee if regulators do not approve its proposed $39 billion acquisition of T-Mobile USA.

The carrier will pay $6 billion in fees and other benefits to T-Mobile parent Deutsche Telekom, a record by a large stretch, implying AT&T has a strong belief the deal will be approved.



Says a Deutsche Telekom spokesman (via Reuters):

$3 billion would flow directly in cash, but Deutsche Telekom would also receive spectrum and a national roaming agreement. The company did not put a value on that, but according to analysts' estimates the spectrum and roaming agreement would amount to $3 billion.

The spectrum is likely worth the bulk share, or $2 billion, with the roaming agreement worth the rest.

That being said, Deutsche Telekom CEO Rene Obermann says he believes the deal will be approved sometime before June of 2012.

Written by: Andre Yoskowitz @ 14 May 2011 14:57

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• 6 comments

• ZeusAV

  Even though I hope this merger doesn't go through, I'm pretty sure that it will. AT&T would not put up that kind of cash if they weren't almost 100% sure.
  
  A GSM monopoly for AT&T doesn't look good for consumers.

  14.5.2011 16:17 #1

• biglo30

  I really hope that deal doesn't go through.

  14.5.2011 20:39 #2

• xnonsuchx

  So AT&T made a crappy deal that would screw them??? Sounds like that alone makes them DESERVE it!

  15.5.2011 17:29 #3

• salsa36

  It should happen, money talks...........
  
  
  I love the T mobile commercials!!!!!!!!!

  15.5.2011 23:11 #4

• pmshah

  T mobile offers the best options for any tourist visiting US from a GSM country - read Rest of the world.
  
  If merger goes through GSM service will be a huge monopoly under AT&T detrimental to consumers' interests.
  
  Maybe they will come back under a different garb.

  20.5.2011 19:49 #5

• salsa36

  [quoteIf merger goes through GSM service will be a huge monopoly under AT&T detrimental to consumers' interests. ] Good point, but that's what businesses are all about!

  20.5.2011 23:36 #6