AT&T → T-Mobile USA
AT&T's $39bn agreement to buy T-Mobile USA from Deutsche Telekom, which would have made it the largest US mobile operator, was abandoned in December 2011 after the Justice Department sued to block it — and the spectrum it had to hand over strengthened the rival it had tried to absorb.
Abandoned in December 2011 after the Department of Justice sued and the FCC opposed it; AT&T paid Deutsche Telekom about $4bn.
- Value
- $39B
- Announced
- March 2011
- Outcome
- Terminated
- Sector
- Telecom
- Deal type
- acquisition
- Acquirer
- AT&T (United States)
- Target
- T-Mobile USA (United States)
Why it mattered
Deutsche Telekom wanted out: T-Mobile USA had been losing contract customers since the iPhone arrived and faced heavy spending on its network and spectrum. On 20 March 2011 AT&T agreed to pay about $39bn — $25bn in cash and about $14bn in shares that would have given Deutsche Telekom roughly 8% of AT&T and a board seat. AT&T valued the synergies above the purchase price, with a run rate of more than $3bn a year from the third year, and promised to extend its 4G LTE network to 95% of the US population, citing an impending shortage of spectrum. The combination would have held about 43% of the market.
AT&T also accepted a large reverse break-up fee: if regulators blocked the deal it would pay $3bn in cash, transfer AWS spectrum it did not need for its initial LTE roll-out and grant a roaming agreement. The Justice Department sued to stop the merger on 31 August 2011, and staff at the Federal Communications Commission concluded that it was likely to raise prices, weaken incentives to innovate and narrow consumer choice. AT&T withdrew its FCC application in November to concentrate on the court case, explored selling assets to Leap Wireless to meet the objections, and on 19 December 2011 agreed with Deutsche Telekom to terminate, taking a $4bn pre-tax charge.
What it left behind
T-Mobile USA put the extra AWS spectrum into its LTE roll-out, merged with MetroPCS in 2013 in a reverse takeover that gave it a stock-market listing, and the same year relaunched itself as the "Un-carrier", with contract-free plans. In April 2020 it completed the purchase of Sprint, after the Justice Department approved the deal and a court rejected a challenge by state attorneys general. The consolidation blocked in 2011 happened anyway, with T-Mobile as the buyer: it is now the second-largest US wireless carrier, with 140 million subscribers at the end of September 2025, and Deutsche Telekom, which had tried to sell it, holds a majority stake. A reverse break fee is usually read as a buyer's show of confidence; if the deal fails, it is capital handed to a competitor, and should be priced as such.