Tuesday 10 April 2012

US government blocks mobile merger

Thanks to Jonny Richmond for coming up with a real “wow example” in his essay on government intervention in mergers and takeovers. The example given was of a failed takeover bid from the United States in 2011 where the second largest mobile phone company (AT&T) attempted to takeover the 4th largest operator (T-mobile USA) in a proposed $39 billion deal. The reasons this deal was eventually dropped was due to government intervention from the U.S. government. The American government actually sued to block AT&T’s acquisition of T-Mobile USA, a deal that would have created the largest carrier in the country. The reason the U.S. government intervened was to protect customers.  James M. Cole, the Deputy Attorney General, said: 

“We believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services”.

This article from the New York Times gives more detail:

The AT&T/T-mobile USA deal was finally called off in December 2011 with the main reason being the opposition of the U.S. government to the proposed takeover.

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