LOS ANGELES — AT&T Inc. will hang up the phone on its embattled bid to take over T-Mobile USA for $39 billion.
The company is calling off the deal, which has hit a
series of increasingly serious state and federal roadblocks, and said it
would take a $4 billion pre-tax charge as part of its breakup fee to
T-Mobile.
In a news release about the end of the deal, AT&T
cited the opposition of the Department of Justice and the Federal
Communications Commission, which had opposed the deal on the grounds
that it would create a less competitive wireless industry and
potentially lead to higher prices for consumers.
But AT&T said that the acquisition would have
helped the wireless industry, and consumers, by allowing the company to
continue building out its network and avoiding what it sees as a coming
shortage of wireless airwaves, or spectrum, that companies believe is
threatening the industry.
“The AT&T and T-Mobile USA combination would have
offered an interim solution to this spectrum shortage,” the company
said in its statement. “In the absence of such steps, customers will be
harmed and needed investment will be stifled.”
The deal’s end comes after an uptick in regulatory
and legal action against the acquisition. Late last month, AT&T
withdrew a crucial clearance application from the FCC, and soon after,
the Justice Department argued its case to block the deal on antitrust
grounds was no longer necessary, as the deal could only go through with
FCC approval.
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