After the Department of Justice sued to block AT&T’s $39 million merger with T-Mobile, AT&T said it’d be willing to fight the battle in court, claiming that “the facts will prevail” there.
But it seems now that taking up legal arms to try to push the huge acquisition forward isn’t the only game plan AT&T is currently executing. The company may also be working to play ball with the DOJ if the whole court battle thing doesn’t work out.
According to report from Bloomberg, AT&T is currently shopping around its assets to smaller competitors, including the very anti-merger Sprint, in an effort to sell itself to a smaller size and make the DOJ happy. AT&T is supposedly attempting to sell of bandwidth spectrum it owns to smaller companies such as Metro PCS and Leap Wireless, and has also approached Dish Network and Century Link.
As Ars Technica points out, though, Bloomberg’s information is coming from anonymous sources “familiar with the deals,” so it’s tough to say how reliable the information is. We’ve heard before that AT&T would be willing to sell off assets to make the T-Mobile deal go through for as much as $8 billion, according to one report.
And a selloff could help AT&T trim down in order to make the merger work. In its filing against AT&T and T-Mobile’s plans, the DOJ didn’t shut the door to a settlement if AT&T could meet its requirements, but it noted that combining the No. 2 cellular provider in the U.S. with the No. 4 provider would create a huge company: twice as big as Sprint, the current No. 3 competitor, and a third again as large as No. 1 Verizon. The DOJ claimed that narrowing the field to two big providers and one smaller one would hurt customers and competition.
The DOJ mentioned that some kind of settlement may be possible, just not with the merger as it currently stands. So if AT&T can find a way to bolster smaller companies and competition, perhaps by selling off portions of its wireless spectrum to give other companies a stronger ability to compete, it may find a way to satisfy the DOJ and still get what it wants: T-Mobile.
As it stands right now, that might be a bit of a longshot for AT&T. Sprint has already joined the DOJ in suing to stop the merger, as have the attorneys general of seven states. Among smaller companies, Cellular South just threw its hat into the legal ring on the side of the DOJ and Sprint, according to a story from CNET. Leap Wireless has already stepped into that battle, as well. AT&T doesn’t have a lot in the way of allies.
However, the whole battle isn’t over. AT&T wants to be in court by Jan. 16, 2012, and it’s likely it has more than a few plans of attack to attempt to get its merger approved.
