IT'S OFFICIAL: AT&T, T-Mobile deal is dead
Big Phone's colossal $4bn cockup concludes
AT&T's planned $39bn acquisition of T-Mobile USA from Deutsche Telekom is dead – and it's costing AT&T $4bn to kill it.
"AT&T Inc. said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year," the company said in a statement released on Monday afternoon.
The move was widely anticipated after the US Federal Communications Commission's decision less than one month ago to refer the matter to an administrative hearing – a rare move that signaled the death of the merger to most observers.
That sting of that governmental action was not lost on AT&T chairman and CEO Randall Stephenson, who snapped back in Monday's statement in favor of what he defined as free markets. "[Policymakers] should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry," he said.
After the FCC's decision, AT&T added to the widespread speculation – speculation that approached certainty, actually – about the deal's impending doom when it reported on November 24 that it planned a $4bn charge (its kill fee to Deutsche Telekom) in the fourth quarter in anticipation of the deal going sour.
That charge was also made official in ATT's Monday announcement. "To reflect the break-up considerations due Deutsche Telekom," the company reported, "AT&T will recognize a pretax accounting charge of $4 billion in the 4th quarter of 2011."
It appears that Netflix and RIM now have a deep-pockets competitor for the not-so-coveted award of "Worst business decision of 2012."
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