The Justice Department filed a complaint today to block the union of the second and fourth largest cell phone carriers in the United States, arguing that the merger “would remove a significant competitive force from the market.” The government says that the proposed $39 billion deal violates anti-trust law, despite AT&T’s filing last month claiming that the merger “would lower prices and increase service in large metropolitan markets.”
News of the Justice Department’s federal court filling sent AT&T shares down 3.4 percent as of 10:55 a.m., while Deutsche Telekom American, which owns T-Mobile, slipped 6.4 percent. AT&T responded by saying they are “surprised and disappointed by today’s action, particularly since we have met repeatedly with the DOJ.”
The company was already pleading their case this week by promising to bring 5,000 call-center jobs back to the country, lest they lose nearly $7 billion in a failed acquisition. A law professor told Bloomberg, “Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight,” and stressed that the government move to block the deal “doesn’t mean they won’t negotiate a resolution at some point.”
U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger [Bloomberg]
AT&T Seeks Approval of T-Mobile Deal With Offer to Bring Home 5,000 Jobs [Bloomberg]
