Government sues to block AT&T, T-Mobile merger

FILE - The AT&T and T-Mobile logos. (AP Photo)
August 31, 2011 2:10:06 PM PDT
An administration official says the Justice Department is moving to block AT&T's $39 billion deal to buy T-Mobile USA.

The government contends the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and raise prices.

The deal has faced opposition from consumer groups and No. 3 carrier Sprint.

The official spoke on condition of anonymity in advance of the public announcement.

A failure of the deal would put T-Mobile in a difficult position. It's struggling to compete with the larger carriers, and owner Deutsche Telekom AG has said it's not willing to invest more in the venture.

AT&T has promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.


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