AT&T may have to make some major concessions in order to get FCC approval for its acquisition of T-Mobile, according to analysts at Citadel Securities, and Sprint may just be the beneficiary of those concessions. AT&T has already stated, in its Stock Purchase Agreement filed March 21, that it is ready to divest up to 40 percent of T-Mobile's subscribers. But AT&T may need to make even more significant concessions to get the deal done.
An FCC official told The Wall Street Journal, "There's no way the chairman's office rubber-stamps this transaction. It will be a steep climb to say the least." AT&T may be willing to divest even more than 40% of T-Mobile's subscribers to get the deal closed. Sprint had shown interest in acquiring T-Mobile, but was outbid by AT&T, so now it may have a chance to pick up at least a portion of the company.
According to the Citadel report:
"[T]he eventual outcome of this deal could be that AT&T does successfully acquire T-Mobile, but is required to divest perhaps up to half of T-Mobile’s subscribers. We would view this outcome as positive for Sprint, which we believe would be a likely bidder for the divested operations. Although not as favorable as a straight Sprint/T-Mobile merger (at a fair valuation), Sprint’s ability to acquire some portions of T-Mobile would help it achieve better scale."
According to the Wall Street Journal report, the FCC plans to proceed slowly, so it may be a while until we see where the chips may ultimately fall.