AT&T May Avoid $6 Billion Payment to T-Mobile if Deal Fails
This gets more interesting as each week passes by. After the Department of Justice sought to block the sale of T-Mobile to AT&T last week, a new wrinkle has been thrown into the fold – T-Mobile may not be eligible for the $6 billion they’re owed if the deal doesn’t go through under certain circumstances.
A report from a Reuters source mentions scenarios where AT&T may be able to get off free should the sale go unapproved. One scenario would be if a certain amount of time passes without a decision from the FCC. If the FCC approves it after whatever deadline this is – great (for AT&T)! If they block the sale after this date, though, AT&T could get out of that $6 billion hole.
Another scenario would be due to devaluation of T-Mobile. A devaluation would happen if AT&T were asked to sell off parts of T-Mobile in order to meet regulators’ satisfactions. If AT&T is forced to sell however much they would be forced to sell (if that scenario were to play out) they could choose to back out of the deal and keep their $6 billion.
With analysts saying AT&T very well may need to compromise and give up some of what they’re buying, Deutsche Telekom has mentioned that they have drawn up several plans to carve out assets without devaluing T-Mobile USA.
While no official has decided that this would be a requirement in order for the deal to go through, the chances of that happening are high enough to raise concerns for both parties involved. With that, it looks like only time will get in the way of T-Mobile’s future either way.