AT&T drops $39 billion bid to buy T-Mobile USA
(Reuters) – AT&T said it had agreed with Deutsche Telekom to drop its $39 billion bid to buy the German company’s U.S. wireless unit amid increasing regulatory obstacles to the planned deal.
AT&T said in a statement on Monday that it will enter a roaming agreement with Deutsche Telekom.
AT&T’s plan to buy T-Mobile USA, first announced in March, has met with opposition from the U.S. Department of Justice and the Federal Communications Commission.
In late November AT&T said it would take a $4 billion charge in case the deal collapsed, including a $1 billion book value for the spectrum AT&T would have to give to T-Mobile USA.
The charge is part of a break-up fee agreement, giving Deutsche Telekom a cash payment of $3 billion, roaming services agreement and a package of mobile licenses for T-Mobile USA.
Deutsche Telekom said it will return to reporting T-Mobile USA as part of its continuing operations and that its group forecast for 2011 of an expected earnings before interest, tax, depreciation and amortization (EBITDA) of around 19.1 billion euros ($24.86 billion) would remained unchanged.
($1 = 0.7682 euros)
(Reporting By Nicola Leske; Editing by Phil Berlowitz)
Mochila insert follows…