AT&T and T-Mobile Call Off $39 Billion Merger


     (CN) – AT&T has abandoned its plans to acquire T-Mobile for $39 billion, an announcement the Justice Department applauds as a “victory” for consumers.



      The deal would have required German parent company Deutsche Telekom AG to sell its T-Mobile USA subsidiary to Texas-based AT&T. After the companies entered into a merger agreement in March, federal regulators, consumers and competitors responded with antitrust lawsuits and investigations.
     In the government’s August lawsuit, it said that AT&T and T-Mobile are two of only four cellphone companies in the United States with nationwide networks and “a variety of competitive attributes associated with that national scale and presence.
     “We sued to protect consumers who rely on competition in this important industry,” Acting Assistant Attorney General Pozen said in a statement Monday. “With the parties’ abandonment, we achieved that result.”
     But AT&T has distanced the federal complaint from its decision to end merger talks.
     “The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry,” AT&T said in a statement Monday. “It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.”
     AT&T said it will recognize a pretax accounting charge of $4 billion in the fourth quarter of 2011 and “enter a mutually beneficial roaming agreement with Deutsche Telekom” to reflect the break-up considerations for the German company.

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