AT&T May Not Have To Pay The $6 Billion Fee If T-Mobile Purchase Falls Through

AT&T is still hoping that the purchase of T-Mobile USA that it wants to make will go through. The US government sued recently to block the merger. However, the deal could still go through if AT&T can come up with a plan that will satisfy regulators that the purchase would not create a monopoly or harm competition in the mobile industry. According to reports talks are being held with regulators, T-Mobile and AT&T. One of the things that AT&T had to be worried about was the breakup fee if the deal didn't go through of roughly $6 billion it would have to pay Deutsche Telekom, the parent company of T-Mobile.

Reuters reports that there are outs for AT&T that would prevent the $6 billion payout if the deal fails depending on certain conditions being met according to sources familiar with the contract. One of the conditions is that the deal would have to fail to meet approval within a certain time period. If the deal doesn't get approval, in whatever the unspecified period is, AT&T doesn't have to pay.

Another way for AT&T to get out of the huge payment for the break up would be for the value of T-Mobile to decline. If the value of T-Mobile declines to a certain point due to assets that the US government might force AT&T to sell. AT&T is expected to submit a proposal to regulators soon in hopes of keeping the deal alive.

[via Reuters]