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AT&T withdraws T-Mobile merger papers from the FCC, will book the break-up fee as a loss in Q4

AT&T withdraws T-Mobile merger papers from the FCC, will book the break-up fee as a loss in Q4
After the FCC Chairman himself asked for an investigation into the AT&T's proposed merger with T-Mobile, America's second largest carrier waved the white flag, and has apparently withdrawn electronically the merger application papers from the Federal Communications Commission.

Deutsche Telekom and AT&T are still planning to pursue a deal if the federal dust settles, but with the increased likelihood that the authorities are willing to shoot down the $39 billion merger no matter how the carriers spin it as it is, AT&T basically acknowledges that the chances are slim to none at this time, since it needs both DoJ and FCC approval.

Moreover, it seems that its accountants will be provisionally booking a $4 billion loss on the whole endeavor that started in the spring. $3 million is AT&T's contractual obligation to pay a break-up fee if the deal doesn't get regulatory approval, and $1 billion is for the book value of the spectrum in question.

Looks like the mammoth carrier that would have been created by the merger won't occur, and Amazon should have included T-Mobile in its Black Friday penny sale. Now the question is how will T-Mobile do on its own, despite that the $4 billion in fees will pad DT's bottomline pretty.

source: AT&T


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