AT&T (NYSE:T) may not have to pay Deutsche Telekom the $6 billion break-up fee if regulatory problems cause AT&T's planned $39 billion acquisition of T-Mobile USA, according to a report in Reuters.
As Reuters, citing a person familiar with the deal, reported: "there are a number of options under which the (fee) contract will not come into effect."
The Department of Justice last week initiated a lawsuit to block AT&T's purchase of T-Mobile USA. Part of the deal calls for DT to receive a break-up fee of some $6 billion in cash and other assets if regulators squash the deal. The source, however, said AT&T would only have to pay if certain conditions exist. For instance, the purchase must receive regulatory approval within a designated time frame otherwise the contract is void, according to Reuters' source. In addition, the value of T-Mobile cannot dip below a certain level, which could happen if regulators demand that pieces of T-Mobile be sold as a condition of AT&T's purchase.
For more:
- see this Reuters article
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