Thursday, November 24, 2011

AT&T Withdraws Merger Application, Reserves Right to Come Back 11/24/2011 San Francisco - AT&T, Inc. and Deutsche Telekom AG yesterday withdrew their application to the Federal Communications Commission for approval of AT&T's $39 billion takeover of T-Mobile USA.

Will T-Mobile get the $4 billion breakup fee?
The two wireless carriers reserved their rights to both defend their position in the ongoing antitrust suit of the U.S. Department of Justice against the deal, and to pursue new filings with FCC for a possible different approach to the acquisition.

AT&T stated in its press release of this morning that it and DT "are continuing to pursue the sale of Deutsche Telekom's U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending ....or alternate means.  As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval."
 AT&T will take a pretax accounting charge of $4 billion in 4Q 2011 to cover possible breakup fees due to DT if the deal does not go through. 

 The withdrawal notice was issued via the Commission's electronic filing system (WT Docket No. 11-65) yesterday, and was first reported in a joint company release of this morning.

As of this story posting, the filed withdrawal statement has not been posted on the FCC site. (Updated: The letter was posted by FCC staff on 11/25, and is copied, below.)

The move followed by one day the announcement by the Commission that Chairman Julius Genachowski launched procedural moves that guarantee FCC disapproval of the AT&T acquisition. The FCC proceeding began with a Commission Notice of  April 14th this year.  

This Tuesday FCC senior staff told the media that Commission Chairman Julius Genachowski placed two draft Orders with fellow Commissioners that strongly signal an eventual denial of approval of the deal by the federal regulatory body. In the non-transparent continuing practice of FCC, those draft Orders were placed "on circulation" with Commissioners and selected staff while withheld from public view.

AT&T - T-Mobile Merger Withdrawal 
Web Analytics