Justice Department Moves to Block AT&T-T-Mobile Merger
The government says combining the two major wireless carriers will stifle competition
Hours after AT&T announced that it would bring back 5,000 outsourced call-center jobs in a bid to win approval of its $39 billion deal to buy T-Mobile, Bloomberg is reporting that the Justice Department has filed a complaint in federal court in Washington to block the takeover because it would violate U.S. antitrust law. "AT&T's elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force" from the wireless market, the U.S. said in its filing. Within minutes of the report, The Wall Street Journal added that "AT&T shares are nose diving and Sprint shares are soaring" on the news.
AT&T can challenge the Justice Department's action in court, according to the AP. But if regulators ultimately reject the deal, Bloomberg adds, AT&T will probably pay T-Mobile owner Deutsche Telekom $3 billion in cash and provide T-Mobile with wireless spectrum in some regions and reduced charges for calls into AT&T's network, as part of a package worth as much as $7 billion.