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AT&T may sell up to 25% of T-Mobile to get the deal approved

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By Alan Friedman

Published: Sep 01, 2011, 11:24 PM

AT&T may sell up to 25% of T-Mobile to get the deal approved

With the Department of Justice promising to use an injunction to block AT&T's planned $39 billion acquisition of T-Mobile as we reported, Reuters is reporting that AT&T is planning on trying to settle with the government before the case reaches the court. The carrier is said to be working on a two-pronged offer to present to the DOJ, and feels confident about it, according to one source for Reuters.

During settlement talks, AT&T is expected to promise the DOJ that it would keep the relatively lower priced mobile plans offered by T-Mobile. In addition, the company would sell 25% of T-Mobile's assets. AT&T does have an incentive to work something out because if the deal fails to close, the terms of the acquisition call for $6 billion in cash and assets to be paid to T-Mobile's German parent Deutsche Telekom.

The government is concerned that if the deal goes through as currently proposed, 3 companies would control 90% of the cellular industry in the U.S.with AT&T leapfrogging over current leader Verizon. But even an asset sale by AT&T might not help sway the DOJ because only Verizon and Sprint, the nation's third largest carrier, could want to and afford to buy such a large chunk of T-Mobile. Both of those companies are already big enough that a purchase of a quarter of T-Mobile could trigger anti-trust investigations of that transaction, which would ruin the whole idea behind the divestment by AT&T.

As far as the court case that AT&T is eager to start against the DOJ, U.S. District Judge Ellen Segal Huvelle in Washington, D.C was chosen at random. She is known to work quickly, a point in favor of the carrier which has asked for an expedited hearing. Experts say that a trial could start in two months unless AT&T is successful with its settlement offer.

source: Reuters

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Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.

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