AT&T may offer to divest up to 40 percent of T-Mobile's assets to gain approval of dealAlex Wagner - Deputy Managing Editor, News Desk
Yesterday AT&T made us put down our plate of turkey and stuffing for a moment and take notice when it announced that it was not only withdrawing the application it submitted to the FCC for the approval of its acquisition of T-Mobile, but also adding a loss of $4 billion to its Q4 2011 records in case the deal gets shot down. Many thought that that news might be the beginning of the end for AT&T-Mobile, but a report out of Bloomberg today suggests that AT&T may have a new plan in the works. According to "a person familiar with the plan," AT&T is planning to address the Department of Justice's antitrust concerns by offering to divest as much as 40 percent of T-Mobile's assets (e.g. spectrum, subscribers).
Keeping up with the AT&T news, today the carrier announced that it believes that it withdrew its application for approval from the FCC before the agency had a chance to vote on whether or not to hold a hearing. AT&T then responded to reports that the FCC must approve the withdrawal, saying that the carrier has "every right" to withdraw and that the FCC's own rules back that up. If the FCC tries to stop the withdrawal, AT&T says that it will "immediately challenge in court." You can find AT&T's statement below.
AT&T has said in the past that it expects to divest some T-Mobile customers and spectrum in order to get the merger approved, so the fact that AT&T is planning to go that route isn't a total shock. It is interesting to hear that AT&T may be considering to sell almost half of T-Mobile's assets to get the DOJ give the deal an A-OK, though, and this news shows that AT&T isn't ready to give up on the deal just yet. There are still quite a few questions surrounding the alleged plan, like what exactly would happen with those divested T-Mo assets (we've heard rumors about AT&T having talks with the likes of MetroPCS and Sprint) and whether or not such a move would be enough to get the Justice Department and the FCC on board with AT&T-Mo. One thing I do know is that this whole situation is really heating up, so be sure to keep it locked to PhoneDog for more!
Statement from Wayne Watts, AT&T Senior Executive VP and General Counsel
The following statement is attributed to Wayne Watts, AT&T Senior Executive VP and General Counsel
"Yesterday AT&T withdrew its application with the FCC for approval of our merger with T-Mobile. We took the required actions, announced this publicly, and filed securities disclosures accordingly. We believe the record will show that we withdrew our merger application before the FCC voted on the chairman's proposed hearing designation order. It has since been reported that the FCC must approve this withdrawal. This is not accurate. The FCC's own rules give us this right and provide that the FCC "will" grant any such withdrawal. Further, this has been the FCC's own consistent interpretation of its rules. We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”