Deutsche Telekom confirms AT&T break-up fee worth $6 billion

FRANKFURT Fri May 13, 2011 2:44pm EDT

Related Topics

FRANKFURT (Reuters) - AT&T (T.N) will give Deutsche Telekom (DTEGn.DE) a break-up fee and benefits worth about $6 billion if regulators reject the proposed takeover of the German company's U.S. business, Deutsche Telekom said on Friday.

In March, when the $39 billion deal was disclosed, the companies said AT&T would pay the German group a record break-up fee of $3 billion, but they did not put a value on other parts of the agreement.

"$3 billion would flow directly in cash, but Deutsche Telekom would also receive spectrum and a national roaming agreement," a Deutsche Telekom spokesman said.

"The company did not put a value on that, but according to analysts' estimates the spectrum and roaming agreement would amount to $3 billion," he added.

Sources familiar with the matter had told Reuters on Thursday that the agreement included about $2 billion worth of spectrum and a roaming agreement valued at roughly $1 billion.

Deutsche Telekom CEO Rene Obermann said on Thursday that he was confident the transaction would be completed in the first half of next year.

The deal needs approval from the U.S. telecommunications regulator, the Federal Communications Commission, and the Department of Justice, which examines antitrust issues around mergers.

AT&T's chief executive, Randall Stephenson, defended the deal at a hearing held by skeptical lawmakers on Capitol Hill on Wednesday.

Obermann is due to testify later in May. (Reporting by Nicola Leske; Editing by Will Waterman)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
Why didn’t the writer mention “T-Mobile” in the story since that is what the Obama Administration is concerned about the result of the merger. If it goes through, score it as a two-way win. Currently, AT&T has some nifty features but, as Kim Komando says, “NO Bars in More Places.” Meanwhile, T-Mobile has lots of strong coverage and pretty good rates.

May 16, 2011 1:15am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.