The carrier merger of the decade won't happening after all. After getting blackballed by the FCC and the U.S. Department of Justice, AT&T's planned acquisition of T-Mobile USA has officially been cancelled. AT&T broke the news in an announcement earlier today:
AT&T Inc. (NYSE: T) said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year.
The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.
Although they won't merge, the two companies nevertheless plan to enter a "mutually beneficial roaming agreement." No specifics have been disclosed yet.
The failed buyout bid won't just hurt AT&T's future prospects. It sounds like the company's bottom line will suffer in the shorter term, too. Today's announcement goes on to note, "To reflect the break-up considerations due Deutsche Telekom, AT&T will recognize a pretax accounting charge of $4 billion in the 4th quarter of 2011."
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