AT&T insists it will keep trying T-Mobile merger
updated 06:25 pm EST, Wed December 7, 2011
Has set aside $10b in anticipation of closing deal
Despite strong opposition from US regulators, AT&T CFO John Stephens asserted that the carrier will keep trying with its proposed acquisition of T-Mobile. At the UBS media conference just held in New York City, he insisted that the carrier would "continue to move forward" in spite of the Department of Justice lawsuit and withdrawing the FCC application. To prepare for the closing of the $39 billion T-Mobile deal, AT&T revealed it plans to use $10 billion cash it has accumulated on its balance sheet.
"We will continue to pursue the sale," he said.
The two involved companies are focusing their efforts on convincing the Department of Justice that the merger should be allowed to go through. The DOJ currently believes that the merger is anti-competitive and violates multiple antitrust laws, with the implication that no amount of concessions would make the deal acceptable.
AT&T has also indicated that it expects to book a pretax $4 billion charge in the fourth quarter for a break-up fee that it must pay to T-Mobile should the deal fall through. US general accounting rules typically only require this of a company if it sees a less than 20 percent chance of a deal being completed. [via Reuters]
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"To prepare for the closing of the $39 billion T-Mobile deal, AT&T revealed it plans to use $10 billion cash it has accumulated on its balance sheet."
Imagine where AT&T would be if it had spent that $10 billion--or the $39 billion it planned to spend to acquire T-Moblie--on adding more cell towers or improving customer service. It's wouldn't be at the bottom of Consumer Report's customer satisfaction survey.
As a T-Mobile customer, I'm one happy guy this merger seems to be collapsing.