Justice Department Blocks AT & T Merger with T-Mobile

The Justice Department on Wednesday sued to block AT&T Inc.'s proposed $39 billion takeover of T-Mobile USA, a surprisingly swift move that dealt a blow to AT&T's ambition to build the largest U.S. cellphone carrier. The government said the combination of the second- and fourth-largest cellphone companies in the U.S. would harm competition and likely raise prices for consumers.

According to the Justice Department, the T-Mobile acquisition "would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services."

T-Mobile parent Deutsche Telekom AG of Germany is well-protected if the deal collapses because AT&T has agreed to pay $6 billion in cash and other considerations if the deal fails to clear regulatory review. (WSJ, 9/1/2011)