Surprise! AT&T Admits Defeat, Withdraws T-Mobile Takeover Attempt, Pays $4 Billion Breakup Fee

from the wow dept

This is definitely a surprise, but it looks like AT&T finally read all the writing on the wall, and realized it was unlikely to win its fight with the DOJ and FCC and has officially killed its plan to try to purchase T-Mobile… meaning that it now has to pay the $4 billion breakup fee. While the trend of where this was heading was becoming increasingly obvious over the past few months, it’s still pretty shocking on the whole. Getting big mergers like this through had become pretty standard, and AT&T (especially) excelled at the political dealing to make such things work. However, the growing public outcry and concerns over the lack of competition that would result seemed to finally have had a real impact.

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Companies: at&t, t-mobile

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Comments on “Surprise! AT&T Admits Defeat, Withdraws T-Mobile Takeover Attempt, Pays $4 Billion Breakup Fee”

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Jay (profile) says:

Another view

Business week has a good take on this. While AT&T thought this would be business as usual, the fact is they raise a lot of alarm bells.

AT&T used the jobs line.
AT&T used blurred math to support the merger.
AT&T used lobbying companies from every part of the US, who didn’t see a point in supporting AT&T except for dollar signs.

Let’s face it, AT&T was their own worst enemy.

Frankz (profile) says:

Did they “admit defeat”? Or just lie their way out of it, like they tried to lie their way into it? Claim it was a “business decision” to pull out, or due to some vast government conspiracy, everybody’s out to get them, or some such crap.

As for the $4 billion they have to pay DT, another article says that will really only cost them about $1.4 billion after a tax write off.

Steve R. (profile) says:

Someone is Getting Rich

One has to wonder about the legitimacy of the fees associated with mergers, both with success and failure. I seriously doubt that any of the “facilitators” putting this now failed merger into play actually incurred $4B in billable hours or other valid expenses. The shareholders of AT&T should be screaming.

Just as a casual observer, it seems that corporate managers simply play the merger game as a technique of extracting the corporate wealth into their own pockets. I have no proof, but I have observed too many corporate mergers that seem to fail the smell test.

Jim says:

Who really won here?

I see a lot of hi-fives and such and wonder who really won?

DT is still not going to build up T-Mobile (no matter who tries to make them).

AT&T is not going to increase their build outs (cost too much, with too much regulation).

Customers on both sides still have crappy service (lets be honest T-Mobile sucks…and yes I can say that as a customer).

So who really won here? Nobody.

iBelieve says:

Nothing they do seems to limit public outcry

Like where will they make up this $4B if that is really a true cost to them? From the public, that’s where. They will in all likelyhood lash out with higher prices for smaller candy bars, that’s all. Greed goes against the public good when they do not tell customers of usage overage commits and charge an unconscienable amount for them. Still, they waited for legislation against that practice before they stopped.

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