The latest adjustment that may need to be made in order to salvage the AT&T/T-Mobile merger is a reduction in the amount of money that will change hands.
Bloomberg cites “three people with direct knowledge” of the contract between the two companies as saying that if there is too much regulatory strain, AT&T could lower the amount of its purchase price.
The mobile carrier made waves around the world when it offered to dole out $39 billion for the controversial acquisition. The only problem is just like anything else, that number is only going to rise after everything else is factored in.
Most taxing will be the cost of complying with federal agencies with regard to regulatory approvals. The government will undoubtedly force some sort of change or remedy to the deal as it stands now. If those remedies cost more than $7.8 billion, AT&T will be able to bring down the $39 billion price tag to save some money. Both sides reportedly agreed to this before anyone signed off on the deal.
In recent weeks, AT&T has suffered severe blows to its proposed offer. The US Department of Justice has filed a lawsuit alleging the company of trying to overstep antitrust laws. That doesn’t bode well for the company being able to get government approval for the buyout. Rival carrier Sprint has also stepped in and filed its own lawsuit in opposition to the deal.
Even as the battle between the private and public sectors rage on with the hopes of reaching a resolution, some analysts predict the saga will end without any merger taking place. If that happens, AT&T is still bound to shell out serious cash to T-Mobile. And T-Mobile has said it doesn’t have a backup plan for if the buyout doesn’t go through.
In other words, it’s just really messed up.
