According to the old “people familiar with the matter” story AT&T will have to pay Deutsche Telekom $6 billion in assets, cash and services if a deal isn’t approved by US regulators. The $6 billion would break down into the $3 billion in cash previously thought but an additional $2 billion worth of spectrum and a roaming agreement valued at $1 billion would also be picked up by Deutsche Telekom. The sources asked not to be named as those details were not public.
The cash break-up fee is approximately 7.7% of the total value of the deal and with the inclusion of the assets and services AT&T could stand to lose up to 15.4% of the total value of the deal. The high fee alludes to the high level of confidence that AT&T has it can convince regulars to approve the deal. After yesterday’s showing at the Senate Hearing both AT&T and T-Mobile have their work cut out for them to convince regulators this deal is in the best interest of the industry and consumers.