AT&T might avoid $6 Billion dollar breakage fee if T-Mobile merger fails

September 6, 2011
0

Another week has passed and we are hearing even more details regarding the ongoing battle with the AT&T T-Mobile merger. This entire thing is starting to get a little hairy and will probably continue to get worse. Last we heard the US Government and Department of Justice filed a lawsuit to stop the merger, and that is only the beginning.

We already knew that based on certain rules and guidelines set during the initial stages AT&T would be required to pay T-Mobile and Deutsche Telekom around $6 Billion dollars for breaking contract if the deal ends up not happening, or fails to move forward. New reports this week are now starting to trickle in stating that this might actually not happen either and AT&T may be able to avoid the $6 Billion dollar fee altogether.

"There are a number of options under which the (break fee) contract will not come into effect."

A new report by Reuters mentions a few different cases or scenario's where the break fee could in fact be waived. I don't think T-Mobile would be too happy about that one either. Some of those include that the acquisition has to receive regulatory approval within a certain timeframe, the source said. Otherwise, the contract is void. Another being T-Mobile's value must stay strong and not drop below a certain point or the break fee will also become void.

Sources also state the U.S. Department of Justice is holding talks with the two companies and AT&T is planning to present a proposed solution to U.S. antitrust regulators on the matter. Only time will tell, but sadly time isn't on T-Mobiles side.

[via Reuters]


Recent Stories