AT&T will likely have to pay billions to T-Mobile parent if purchase deal falls through

Sep 7, 2011
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AT&T will likely have to pay billions to T-Mobile parent if purchase deal falls through

Earlier this week I mentioned a report that was making the rounds claiming if the T-Mobile purchase by AT&T fell through due to regulatory objections or concessions that proved too costly AT&T might not have to pay the billions in breakup fees. Today T-Mobile parent company Deutsche Telekom is saying that is incorrect. Apparently the breakup fee, or at least part of it will still be due.

Apparently even if the regulators fail to approve the deal or if the deal takes too long or concessions valued at more than $7.8 billion are required for the deal to go through AT&T may still have to pay T-Mobile a lofty fee. That fee is said to be $3 billion in cash along with the giveaway wireless spectrum not needed for LTE rollout, and AT&T would be forced to enter into a roaming agreement with T-Mobile USA.

The roaming agreement is said to be subject to terms agreeable to both companies. That means T-Mobile would pay for the roaming. Right now it still looks like the merger may not happen, but the door is open for negotiations with both AT&T and T-Mobile with the DoJ. Regulators felt that the deal as it is now would harm the market and likely cause increased prices.

[via PCMag]


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