Apparently the U.S. government is not in agreement with the AT&T purchase of T-Mobile as it has filed court papers in Washington to block the $39 billion merger. According to the U.S. government is would “substantially lessen competition” in the wireless market.
The U.S. is seeking a declaration that AT&T’s takeover of T-Mobile would violate U.S antitrust law which would result in a court order blocking the deal.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.
Most people thought the deal would eventually happen by March of 2012, but it is very unlikely at this point. If this holds, AT&T would pay Deutshce Telekom (owns T-Mobile) $3 billion in cash, and would provide T-Mobile with wireless spectrum in some regions and reduced charges for calls on AT&T’s network. The cost of all of this could top $7 billion.
The major winner here is Sprint. Their stock is up around 7% in early trading.
So how are T-Mobile subscribers feeling today? Is anyone surprised by this news? I certainly am.