Deutsche Telekom indicated it is open to working with the Department of Justice on conditions that might allow the regulator to approve AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile USA.
"If there are conditions to be attached to the transaction, we will work on the matter together with AT&T," Deutsche Telekom spokesman Philipp Kornstaedt told Bloomberg. Multiple reports have indicated AT&T will simultaneously try to fight the Justice Department's lawsuit against the deal and concurrently work with the Justice Department to make the deal more palatable.
In an internal message sent to employees, Deutsche Telekom CEO Rene Obermann said that "there's no point in lamenting" the lawsuit and that the company must deal with it. Reuters reported last week that AT&T may have to divest up to 25 percent of T-Mobile's spectrum and customers to get the deal approved.
Separately, Reuters also reported that Deutsche Telekom could miss out on the $6 billion breakup fee associated with the deal if certain conditions are met. According to the report, which cited an unnamed source, AT&T will not have to pay the breakup free--which includes $3 billion in cash and another $3 billion in spectrum and roaming agreements--if the deal is approved in a certain timeframe or if the value of T-Mobile falls below a certain threshold, which might happen if T-Mobile is broken up.
An AT&T spokesman did not immediately respond to a request for comment. However, a Deustche Telekom representative disputed the Reuters report on the breakup fee. "The story from Reuters misstated the facts," Deutsche Telekom representative Andreas Fuchs told CNET. "The breakup fee was agreed precisely to deal with the possibility that regulatory approval is not obtained."
- see this Bloomberg article
- see Reuters article
- see this CNET article
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