It's one thing to have senators and public-interest crusaders fighting a proposed merger. Every deal has its detractors, after all. But when the Department of Justice files a suit to destroy the deal outright, knees start a-knocking.
That's why shares of telecom giant AT&T
I'm only surprised that it took the DOJ this long to file a complaint. "A merged AT&T and T-Mobile would combine two of the four largest competitors in the marketplace, and would eliminate T-Mobile, an aggressive competitor, from the market," Deputy Attorney General James Cole said.
Moreover, AT&T is trying to gloss over the inevitable job losses that would come from such a large-scale combination of two direct competitors, by focusing on bringing back a few thousand call center jobs from overseas outsourcing operations. The fact that AT&T is trumpeting this angle far and wide shows how concerned the company itself and outside observers are about job losses.
If the deal is scuttled by this DOJ action or anything else, AT&T will give T-Mobile $3 billion in cash as well as another $3 billion in spectrum licenses and roaming agreements. That's a hefty breakup fee and the reason why Ma Bell is fighting so hard to get the deal done.
The DOJ opposition doesn't kill AT&T-Mobile dead, but it's a very strong strike against the deal. The department also opposed a merger between Nasdaq OMX
If this blockbuster telecom deal does happen, it will be riddled with concessions and divestitures. Comcast
Boosted by those breakup concessions, T-Mobile might even leapfrog Sprint-Nextel
How do you feel about the government potentially killing AT&T's $39 billion deal? Let loose your elation or vitriol in the comments below.