T-Mobile US deal is doomed: Germany

Michael Carroll
05 Dec 2011
00:00

Germany’s government fears damning FCC criticism of Deutsche Telekom’s plan to sell T-Mobile USA to AT&T will scupper the deal, despite both operators insisting the sale remains on track.

The government claims Germany’s former incumbent wasn’t clearly informed of the potential risks of the $39 billion (€28.9 billion) deal when it agreed to sell its US business to AT&T. German officials told FT.com they believe the sale is doomed to failure, or will at least require sweeping concessions by Deutsche Telekom and AT&T to gain approval.

Germany’s government is the largest stakeholder in Deutsche Telekom, with a 32% holding. Its fears for the deal have increased since US regulator FCC claimed the transaction would severely impact competition in the US in a damning assessment late November.

That review prompted AT&T and Deutsche Telekom to pull their merger applications from the FCC, to focus on a separate objection raised by the US Department of Justice. However, both firms insist they are still pursuing the sale.

AT&T has since hit back at the FCC’s report claiming the regulator refers only to facts that back up its claims and speculates where no evidence is available.

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