AT&T, DOJ ordered to come up with settlement plans by Sept. 21

The federal judge overseeing the Department of Justice's lawsuit to block AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile USA ordered the government and AT&T to be prepared to come to court Sept. 21 to discuss the prospects of a settlement.

U.S. District Court Judge Ellen Huvelle's order is likely to increase the intensity of any negotiations between the two sides over possible concessions AT&T might make.  The judge also ordered AT&T and the Justice Department to develop a proposed schedule for the case by Sept. 16 that "will facilitate the just, speedy and inexpensive determination of all pretrial matters and the trial of this case."

The judge's order came shortly after Sprint Nextel (NYSE:S) filed its own lawsuit with Huvelle, arguing that the deal violates the Clayton Antitrust Act. (See related article here.) AT&T has publicly vowed to fight the deal in court but is widely assumed also to be negotiating with the government on possible concessions for a settlement.

Meanwhile, according to a Bloomberg report, AT&T can lower its price tag for T-Mobile if regulators propose remedies that are too costly. According to the report, which cited three unnamed source familiar with the contract, if regulators demand asset sales that are more 20 percent of the deal's value, or about $7.8 billion, AT&T can pay less than the original $39 billion. Additionally, the report said AT&T could walk away from the deal and pay Deutsche Telekom the deal's breakup fee if the concessions top 40 percent of the deal's value.

AT&T will have to pay Deutsche Telekom a breakup fee of $6 billion--made up of $3 billion in cash and $3 billion in spectrum and roaming agreements--if the deal does not get regulatory approval. Representatives from AT&T and Deutsche Telekom declined to comment, according to Bloomberg.

For more:
- see this National Journal article
- see this Dow Jones Newswires article (sub. req.)
- see this Bloomberg article

Realted Articles:
Sprint sues to block AT&T/T-Mobile deal
Deutsche Telekom: We're open to conditions on AT&T/T-Mobile deal
Where does T-Mobile go from here for 4G?
Report: AT&T hires bank to explore $8B in asset sales on T-Mobile deal
Entner: Without AT&T, T-Mobile will be left to a slow death

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