AT&T’s (NYSE:T) proposed acquisition of T-Mobile for $39 billion suffered another blow Tuesday when the Chairman of the U.S. Federal Communications Commission released a draft order to his fellow commissioners, citing that the deal would significantly hurt competition in the telecom market and lead to job losses. [1] This is not the first time that AT&T’s proposed acquisition of T-Mobile has found itself in trouble. The Department of Justice filed an antitrust lawsuit in August this year to block this deal (see Government Delivers Blow to AT&T and T-Mobile Deal). Sprint (NYSE:S) then filed with its own lawsuit to block this deal (see Sprint Jumps on the Dog Pile and Sues AT&T).
See our complete analysis for AT&T stock here
AT&T commented on this action of FCC:
The FCC’s action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both. At this time, we are reviewing all options. [2]
Our $38 price estimate for AT&T stock is about 30% above market price.
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Notes:- AT&T’s $39 Billion T-Mobile Deal Faces New Roadblock as FCC Seeks Hearing, Bloomberg, November 23rd, 2011 [↩]
- AT&T Comments on FCC Action, BusinessWire, November 22nd, 2011 [↩]
