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AT&T to Pay Deutsche Telekom Hefty Break-Up Fee if Regulators Block Merger

Deutsche Telekom wont walk away empty-handed if U.S. regulators reject AT&Ts planned $39 billion acquisition of T-Mobile USA.

Germany-based Deutsche Telekom the parent company of T-Mobile USA has confirmed that AT&T will give the European telecom giant a break-up fee and benefits worth roughly $6 billion, Reuters reported.

AT&T previously noted that it would pay a break-up fee of $3 billion, but a Deutsche Telekom spokesman also told Reuters the company would receive spectrum and a national roaming agreement.

Sources previously told Reuters that the agreement included roughly $2 billion worth of spectrum and a roaming agreement valued at about $1 billion.

U.S. regulators, including the Federal Communications Commission and Department of Justice, must approve the merger between AT&T and T-Mobile USA, the second- and fourth-largest U.S. wireless operators.

The merger is expected to face a rigorous antitrust analysis at the Justice Department, and lawmakers on Capitol Hill this week peppered AT&T CEO Randall Stephenson with some tough questions.

The transaction would make AT&T the largest mobile operator in the United States with roughly 130 million customers and eliminate a national wireless competitor that has been struggling with subscriber losses.

AT&T serves 97.5 million customers, including 68 million postpaid subscribers. T-Mobile USA supports 33.63 million customers.


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