AT&T/T-Mobile Merger May be Killed Off if Justice Department Drops Lawsuit
Published on: 10th Dec 2011
Note -- this news article is more than a year old.
When AT&T dropped their request for approval from the telecoms regulator for the T Mobile USA takeover, it was expected that the company would throw its resources at winning the lawsuit filed by the Justice Department that was seeking to block the deal.
However, the Justice Department has itself now decided to ask a Judge to allow them to drop the lawsuit - and indirectly, this could kill off the deal as well.
Lawyers for AT&T and T-Mobile have argued that if they win the lawsuit, then when they took the merger proposal back to the FCC, then their case would be significantly stronger. However, if the lawsuit doesn't even happen, then the deal is effectively dead, as the FCC has already said it opposes the deal.
The trial requested by the Justice Department is due to start next February, unless the District Judge agrees to the government's petition to drop the case.
U.S. District Judge Ellen Segal Huvelle is however concerned that there may not be enough time after the trial to then petition the FCC for merger approval before the September deadline for the deal expires.
In such a situation, the trial, regardless of outcome, would have been a waste of time, and taxpayers money.
AT&T wants to push the case ahead, not just to complete the takeover, but to avoid having to make a payment worth as much as USD6 billion to T-Mobile for failing to secure the deal in time. A payment for which AT&T gets nothing back in return.