The rejection of the Justice Department of AT&T’s planned purchase of T-Mobile USA will challenge new federal terms on blocking mergers and the companies’ resolve in creating the country’s largest mobile carrier.
AT&T promises to go against the decision of the Justice Department. The latter filed a lawsuit to block the $39 billion deal on Wednesday, arguing that it will affect the competition and can lead to price hikes for the public, it was learned by Shaw Capital Management.
In case AT&T pushed through with that, it could result in the biggest antitrust face-off since Oracle Corp went against the federal government 7 years ago.
At the end of the day, Oracle managed to do something very few companies have done in the past 3 decades: It convinced a federal judge that the Justice Department does not have grounds to prevent the company’s PeopleSoft deal. Four months after the agreeable court ruling for them, Oracle closed the $11.1 billion takeover.
Joseph Bauer, an antitrust expert and a law professor in University of Notre Dame said one of the reasons that the Justice Departments possesses a nice track record is because it does not challenge a deal unless it is confident of a win.
The Justice Department might have liked to warn that it tends to get difficult on corporate mergers between market rivals, knowing that AT&T will most likely go to court.
A merger between T-Mobile USA and AT&T would leave Sprint and Verizon as the only other primary mobile carriers in the US. AT&T is currently the No. 2 rank while T-Mobile, which is a subsidiary of Deutsche Telekom AG, ranks at No. 4. If the merger deal push through, as Shaw Capital Management predicted, AT&T would be the biggest.
Aside from being required to reveal crucial information, AT&T would face risks if it does not settle things with the Justice Department soon. Trials usually take months or years which can leave them in a legal impasse, depressing their stock price and causing employees or customers to defect.
Aucun commentaire:
Enregistrer un commentaire