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AT&T To Pay T-Mobile $6 Billion If Deal Isn’t Approved

According to the old “people familiar with the matter” story AT&T will have to pay Deutsche Telekom $6 billion in assets, cash and services if a deal isn’t approved by US regulators. The $6 billion would break down into the $3 billion in cash previously thought but an additional $2 billion worth of spectrum and a roaming agreement valued at $1 billion would also be picked up by Deutsche Telekom. The sources asked not to be named as those details were not public.

The cash break-up fee is approximately 7.7% of the total value of the deal and with the inclusion of the assets and services AT&T could stand to lose up to 15.4% of the total value of the deal. The high fee alludes to the high level of confidence that AT&T has it can convince regulars to approve the deal. After yesterday’s showing at the Senate Hearing both AT&T and T-Mobile have their work cut out for them to convince regulators this deal is in the best interest of the industry and consumers.

Reuters via BGR

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POSTED ON May 12, 2011, , , , , ,

Comments:10

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  1. Anonymous Reply
    11/05/12

    i really want a dose of the denial pill everyone’s taking. do you think blue would risk this kind of money and delay of their build out if they hadnt made calls to their friends in washington before making the announcement? This is a multi-billion dollar deal that could hurt both companies financially and competitively if they didnt think the deal would go through. Their lobbying budget is almost as big if not bigger than our build out budget so I’m pretty sure all you saw yesterday was grandstanding by the politicians…and nothing more.

  2. Anonymous Reply
    11/05/12

    This is precisely what should happen. DT should then use this cash and extra spectrum to secure their position in the US, by extending the network, and getting better contracts with handset manufacturers to get the handset people WANT. To put themselves at the forefront. Not always the “also carries”.

  3. Hamster Reply
    11/05/12

    Having the benefit of a roaming agreement with AT&T and additional owned spectrum would make Tmo even more attractive to Sprint as well, probably. The roaming agreement and spectrum might make it easier for Sprint to run the parallel incompatible networks while they transition customers to WiMAX (or, more hopefully, LTE if they decide to make that switch)

  4. Anonymous Reply
    11/05/12

    I REALLY REALLY hope this deal doesnt happen…. T-mo will use the Billions to up the anty and who knows… maybe Google will get busy and buy them…. I mean T-mo was the FIRST android phone so you know there is some love there… I remember a while back seeing a comment from someone at google expressing how much they wanted a wireless company but didnt want to start from scratch… WELL GOOGLE… Here is your shot… forget about trying to match or beat facebook, and lets get rolling with wireless co…

  5. Debra Phagan Reply
    11/05/12

    Wish I could say I could believe in the government/FCC to do something fair here, but history has shown otherwise. I have some mild hope, but it’s tame and slowly being dwindled. Especially when you read stuff like this:

    “Regulator to join Comcast after OK of NBC deal”

    http://www.washingtonpost.com/business/economy/regulator-to-join-comcast-after-ok-of-nbc-deal/2011/05/11/AFSSl6zG_story.html

  6. Todd_the_Hunn Reply
    11/05/12

    Baby its going to be going on for over year . Wait till Xmas .

  7. DtheArtist Reply
    11/05/12

    Please let them fall flat on their faces on how cocky they are just because “they have the money”, but they could not back it up at the Senate hearing yesterday. They repeated the same ole bull they been saying all along with no other further statements or valid counter arguments to the questions & “fact” raised by everyone else. AT&T got punched every which way & didn’t know what way to turn at that hearing.

  8. Anonymous Reply
    11/05/12

    The ideal situation would be to have a large non-telco company like google buy to tmo and let it continie to run as an independent company…..that means no jobs lost and maybe just maybe tmo would be run properly. It would be strange if google bought tmo usa. What would that mean for Android? One can only dream………sigh

  9. craigers Reply
    11/05/12

    This is the only reason I think DT may keep T-Mobile around if the deal isn’t approved. They stand to get significant assets to help move T-Mobile move up. If they get this 6 billion and the iPhone 5 it could be a significant boost to T-Mobile and DT.

  10. Todd_the_Hunn Reply
    11/05/12

    If this Merger passes expect to see everyone voting in favor on the FCC to be working for AT&T days after the vote . They won’t even have to leave DC .

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