AT&T to Take $4 Billion Charge to Cover Costs if T-Mobile Deal Fails
AT&T said late on Wednesday night that it will take a $4 billion charge as opposition to its T-Mobile USA purchase mounts.
The charge reflects $3 billion in cash and $1 billion worth of spectrum that AT&T will owe T-Mobile parent Deutsche Telekom if the deal fails to garner regulatory approval.
The companies also said they would withdraw their pending applications before the Federal Communications Commission seeking approval for the deal, though they intend to continue fighting for it.
“AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice,” the companies said in a statement. “As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval.”
The FCC chairman earlier this week indicated he was seeking a hearing on the deal, which commission staff found will lessen competition and lead to fewer U.S. jobs.
AT&T is already facing a Department of Justice lawsuit seeking to block the $39 billion purchase.