According to Bloomberg Businessweek, AT&T is preparing a new remedy proposal to the Justice Department in an attempt to save its troubled $39 billion takeover of T-Mobile. Bloomberg"s anonymous source claims that AT&T is considering an offer to divest as much as 40 percent of T-Mobile USA"s assets in an attempt to allay the Department of Justice"s fears that the merger would lessen competition in the mobile market.
This divestiture would be a larger portion of assets than initially expected from AT&T, and it is not clear what portions of T-Mobile"s business AT&T is considering getting rid of. As you"ll recall, the Justice Department filed suit to block the deal at the end of August. The merger deal has more recently hit some turbulence amid news that AT&T could take a $4 billion charge if their proposed merger with T-Mobile fails, and the withdrawal of its application for FCC approval of the deal in an attempt to focus more on the Justice Department case. This latest deal proposal hints at a bit of desperation from AT&T"s camp.
"If there were a last, best offer to be made, they would have made it a long time ago," Craig Moffett, a Sanford C. Bernstein & Co. analyst in New York, said to Bloomberg Businessweek. "It"s very hard to envision a solution that would satisfy the problems the DOJ found with the deal. Realistically, AT&T is going to take its chances in court in February. It"s all or nothing."
We"ll see if this proposal is enough to convince the DOJ.