AT&T’s proposed takeover of T-Mobile to collapse:
Well it has been a bit of a debacle since its inception many months ago, and now the strong opposition to the proposed takeover coupled with other factors are now likely to lead to the collapse of the proposed takeover.
US regulators oppose the anticompetitive nature of the takeover:
One of the main issues that presents corporate takeovers in the US is when they decide to takeover or merge with similar companies. In these cases the anti-trust legislators, and other Government bodies set up to ensure that monopolies and oligopolies are not stifling job growth, and reducing a marketplaces overall competitiveness at the detriment to consumers starts to make life tough, if they suspect the issues raised will be a factor should the desired outcome go ahead.
A number of key opposer’s to the takeover:
There is a couple of key bodies who oppose this move and they are affecting the takeover, they include the Department Of Justice (DOJ) and The Federal Communications Commission (FCC).
The FCC is quoted saying:
Any such merger….“would result in a massive loss of U.S. jobs and investment”.
This is backed up by the fact that there would only be three main carriers left in the US, with a lack of competition in such a huge marketplace thought likely to lead to job losses.
Application removed for now with $4 billion charge:
With approval of the $39 billion takeover still in the balance, both companies still look to pursue the sale eventually, though both have decided to remove the application for now and look to a later date to resubmit this. It has to be said that this is not guaranteed until the FCC has approved the removal of the application, and even if it does get approved the DOJ could block the resubmission at a later date.
The actual decision to postpone events comes at a cost of $4 billion to AT&T who appear to have lost confidence that the deal woudl get approved and perhaps looked set to lose more money the longer the process went on.
Though both companies would go back to the FCC process if approval was granted from the DOJ
“AT&T Inc and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T”.
Chief Executive of AT&T Randall Stephenson was seen to be very optimist back in March when the deal was first muted, and taking this charge shows just how shaky the US recovery is right now, if the talk of job losses as a result of this merger was to be believed.
Some talk of AT&T selling its wireless spectrum before full collapse:
There is however some talk that AT&T may look to sell some of it’s existing wireless spectrum to MetroPCS Communications (PCS) and Leap Wireless (LEAP) to appease competitive issues .
Anthony Munns