AT&T and T-Mobile's proposed merger looks to be shutdown by federal regulators.
November 25, 2011- The proposed merger between AT&T and T-Mobile worth an estimated $39 billion may be coming to an end. The two giants in telecommunications have seen opposition grow over their announced merger. Both withdrew their application to the Federal Communications Commission for further review.
AT&T said it would first concentrate on getting approval from the Federal Government’s Justice Department, which had filed suit to stop its purchase of T-Mobile. The telecom giant also said it would have to pay T-Mobile $4 billion in breakup fees if the deal collapses completely.
The decision comes weeks after Julius Genachowski, the FCC Chairman, announced he was not in favor of the merger. The merger would create the largest wireless company in the United States. However, opponents that include advocacy groups, competitor Sprint Nextel Corp. and government agencies all objected.
Those who objected said the merger between the second and fourth largest wireless companies in the U.S. would end the competiveness in the market and cause higher prices and fewer choices for the consumer.
The two companies released a joint statement on Thanksgiving day saying they would seek FCC approval when the time was practical and stressed the merger was still being pursued.
However, the deal is looking more and more difficult to succeed since it needs the approval of both the Justice Department and the FCC.
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