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With the Department of Justice lawsuit setting AT&T back on their plan to quickly finalize their $39 billion dollar proposed takeover of T-Mobile, they are preparing a “two-track” plan to save the deal. AT&T hopes that any such two-track plan will allow them to find a settlement that will stop the lawsuit from reaching court.
“AT&T is pretty determined that they can find a solution, and they are pretty confident,” one of the sources said, requesting anonymity as the talks are private.
While the exact details of the two-track plan are unknown Reuters is reporting that the first part of the offer is for AT&T to guarantee that it won’t raise the prices of T-Mobile’s current voice and data services. The second part of the two-track plan is for AT&T to divest up to 25% of T-Mobile’s spectrum and customer base. A major concern expressed by government regulators is that AT&T would control more than 50% of 17 different markets across the US should the T-Mobile deal complete. It is unclear who would be eligible to purchase these assets as the anti-trust teams at the government are unlikely to let Verizon and Sprint scoop up every last bit of divested T-Mobile assets and customers. Regional carriers might not have the assets to pick up divestitures from T-Mobile so it will be quite interesting to see how AT&T will present this deal to regulators.
AT&T has furthermore asked for an expedited hearing with the Justice Department and the randomly selected Judge, U.S. District Judge Ellen Segal Huvelle has a reputation for speedy rulings. One source from the Reuters story expects that the case could go before a judge in as little as two months.
“It is always scary to go off to litigation. I suppose there’s a chance that the government could get cold feet,” said Stephen Calkins, who teaches law at Wayne State University.
It’s clear that AT&T is preparing to fight this deal down to its last breath and Deutsche Telekom, with no Plan B for T-Mobile post-AT&T talks is following AT&T wherever they may lead. AT&T is obviously hoping to avoid paying Deutsche Telekom $6 billion in cash and other assets as part of an arrangement should the deal fall through and will use all the money and lawyers at its disposal to continue this fight.