Mergers & acquisitions

AT&T Could Drop 40% of T-Mobile

AT&T Inc. (NYSE: T) appears prepared to divest a large chunk of T-Mobile US Inc. 's business in order to get its merger approved, according to analyses of the agreement.

That would be the agreement between AT&T and Deutsche Telekom AG (NYSE: DT), T-Mobile's owner -- and at 78 pages, not including schedules and annexes, it's not exactly light reading. The New York Times' DealBook blog noted Friday that the complexity comes partly from T-Mobile being a privately owned entity.

The divested chunk could be huge. AT&T looks ready to drop 40 percent of T-Mobile's subscribership and might go even further, analyst Shing Yin of Citadel Securities wrote in a research note Thursday.

That would be good news for Sprint Corp. (NYSE: S), which would probably bid for the divested part of the business, he wrote.

This all makes sense "if AT&T’s strategy were to pre-empt a potential Sprint/T-Mobile deal," Yin wrote. "We think AT&T may simply be intent on acquiring however much of T-Mobile the regulators allow, and divesting the rest as required."

Divestiture is partly built into the sale price, too. For any shareholder or spectrum divestments that exceed $3.8 billion, DT would lower the purchase price accordingly. (Calculations for the divestments' worth are detailed in the agreement.)

You can keep up with Light Reading's ongoing AT&T/T-Mobile coverage here. Or, check out this list of some of our coverage so far.

— Craig Matsumoto, West Coast Editor, Light Reading

comtech3 12/5/2012 | 5:09:11 PM
re: AT&T Could Drop 40% of T-Mobile

This propose acquistion of T-Mobil by AT&T surely is going to go down as the "go sit down" AT&T blunder.This company should divest it's entire board and management! Let's rewind to the 90's when this fool,fool management decided that they want to be cable guys and bought MediaOne to become the largest cable company in America.What happened after that? The greatest churn, or better still,the greatest mass exodus of cable subscribers in the 50 year history of cable in the USA.It was so bad,they end up selling AT&T broadband to Comcast.

Another case in point is the IPhone on their network.They were caught with their proverbial pants down in at have having the capacity to accomodate a BW guzzler like the IPhone.Now, they still have not learned from past errors,and are throwing their fishing rod in to catch T-Mobil, a small tuna,but may end up with a whale instead.

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