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Sunday, September 4, 2011

US network merger threatened by legal action

AT&T’s planned acquisition of T-Mobile USA appears to be on the rocks after the US Department of Justice launched legal action to block the deal. The DoJ says the takeover would adversely affect competition.

Deputy Attorney General James M Cole said “The Department filed its lawsuit because we believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services. We are seeking to block this deal in order to maintain a vibrant and competitive marketplace that allows everyone to benefit from lower prices and better quality and innovative products.”

It’s reported that neither AT&T nor Deutsche Telecom have any plans to withdraw from the acquisition; AT&T is said to be considering a number of remedies that would make the deal acceptable. Any failure of the deal would see AT&T paying Deutsche Telekom several billion dollars in compensation.

[DoJ legal complaint (pdf); Reuters.com; FT.com]

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