Deutsche Telekom CEO Rene Obermann said AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile USA is on track and that he is confident the deal will be approved, just as congressional scrutiny of the deal ratchets up.
"The U.S. antitrust authorities have yet to approve the takeover, but we are confident that the transaction will be closed in the first half of 2012, as competition in the United States remains very intense," Obermann said at the company's annual general meeting in Cologne, Germany.
Obermann also said that if the deal closes, DT won't engage in any other multibillion-euro deals. According to the Financial Times, Deutsche Telekom will instead focus on smaller acquisitions as it shifts its focus away from the U.S. and back to Europe. T-Mobile USA lost 99,000 subscribers in the first quarter and its profit dropped to $135 million, down from $362 million a year ago.
The AT&T/T-Mobile deal is subject to approval by both the Department of Justice and the FCC. If the deal does not go through, AT&T will be required to pay Deutsche Telekom a breakup fee of $3 billion, transfer to T-Mobile certain AWS spectrum that is not needed by AT&T for its initial LTE buildout, and provide a roaming agreement to T-Mobile on terms favorable to both carriers.
And what are T-Mobile's options if regulators fail to approve the deal? GigaOM sketched out several basic strategies, including producing a hit smartphone, aligning more closely with Google (NASDAQ:GOOG) on Android or searching for another buyer or merger partner, likely a cable company.
- see this Reuters article
- see this Dow Jones Newswires article (sub. req.)
- see this FT article
- see this GigaOM article
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