AT&T Withdraws T-Mobile Merger Application from FCC

Big news coming out of the Lone Star state today as Dallas-based wireless carrier AT&T has announced that it has withdrawn its T-Mobile merger application from the FCC. The operator was looking to buy the Deutsche Telekom-owned carrier for close to $40 billion dollars.

The merger deal has hit some major roadblocks over the last few months. In August, the Department of Justice filed a court complaint to block the buyout. Then yesterday, the FCC sided with the DOJ, requesting a formal administrative hearing into AT&T’s proposal…

Apparently the skepticism of the US government, and now the FCC, combined with lawsuits from other carriers like Sprint and C-Spire was too much to handle. The operator has announced that it is terminating the T-Mobile deal in its current form.

But this doesn’t mean that AT&T is giving up on purchasing the nation’s fourth largest wireless provider. Reuters passed on this joint statement from the two carriers:

“This formal step today is being undertaken by both companies to consolidate their strength and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice.”

It does, however, look like AT&T is anticipating the merger to fail. The Verge is reporting that the carrier has already taken steps to pay out the $4 billion dollar break-up fee:

“The big blue mobile operator has decided to take a $4 billion pretax charge on its Q4 2011 accountancy sheet, in recognition of the risk of this deal not going through… …So as far as AT&T’s accountants are concerned, the failure of the $39 billion T-Mobile acquisition is now more likely than its success.”

The bottom line is, although the carriers are still pursuing the buyout, it’s starting to look a lot less likely. The two companies were hoping to complete the merger by the first half of 2012, but without approval from the FCC, that’s not going to happen.