UPDATED: Collapse of T-Mobile deal would cost AT&T $6B

If AT&T (NYSE:T) is unable to successfully close its proposed $39 billion acquisition of T-Mobile USA, it will be forced to cough up cash, spectrum and roaming agreements worth a total of $6 billion, T-Mobile parent Deutsche Telekom confirmed.

"$3 billion would flow directly in cash, but Deutsche Telekom would also receive spectrum and a national roaming agreement," a Deutsche Telekom spokesman told Reuters. "The company did not put a value on that, but according to analysts' estimates the spectrum and roaming agreement would amount to $3 billion."

AT&T previously said in regulatory filings that, if the deal fell through, it would pay $3 billion in cash, transfer to T-Mobile certain AWS spectrum that it didn't need for its initial LTE buildout, and provide a roaming agreement to T-Mobile on terms favorable to both carriers. However, AT&T did not provide dollar amounts for the spectrum or the roaming agreement.

The Deutsche Telekom spokesman confirmed an earlier Reuters report, which cited unnamed sources familiar with the matter, and said the $6 billion includes the $3 billion cash payment, $2 billion worth of spectrum and a roaming agreement valued at $1 billion.

Interestingly, the report came on the same day that Deutsche Telekom CEO Rene Obermann told investors at the company's annual general meeting that he expects the deal to close sometime in the first half of next year. Congressional scrutiny of the deal is starting to ratchet up, and regulators at the FCC and the Department of Justice--who will decide the ultimate fate of the deal--have started analyzing antitrust and competition concerns.

The earlier Reuters report said the $6 billion breakup fee represents 15.4 percent of the deal's value, a record for mergers and acquisitions, according to data from Thomson Reuters.

For more:
- see this Reuters article
- see this separate Reuters article

Related Articles:
Deutsche Telekom chief sees AT&T/T-Mobile deal closing next year
AT&T, Sprint spar over T-Mobile deal at congressional hearing
Sprint CEO on offense, defense over AT&T/T-Mobile deal
Lawmakers worry AT&T could use USF funds for LTE buildout
AT&T files with FCC to acquire T-Mobile
AT&T to face first antitrust hearing this week over T-Mobile deal
Will regulators approve the AT&T/T-Mobile USA deal?
AT&T to buy T-Mobile USA for $39B

Article updated May 13 to include updated information.

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