DoJ Files Antitrust Complaint Blocking AT&T, T-Mobile Merger

On Wednesday, the United States government sued AT&T (NYSE: T) to block its proposed $39 billion acquisition of T-Mobile USA from Deutsche Telekom AG. The Justice Department said that the transaction would "substantially lessen competition" in the wireless market. The government's position is that the deal would violate U.S. antitrust law and is seeking a court order to block the merger. “AT&T's elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.

AT&T (T) shares are falling sharply on the news. At last check, the stock was down nearly 5% to $28.15. Likely on the mind of shareholders is the fact that AT&T would have to pay Deutsche Telekom a $3 billion breakup fee if the deal does not make it past regulators. It will also have to provide T-Mobile with wireless spectrum as well as business concessions worth around $4 billion.

Other stocks that are moving on this news are Sprint (NYSE: S) and J.P. Morgan (NYSE: JPM). Sprint shares have jumped better than 5% to $3.73 as the DoJ's complaint could open the door for a Sprint, T-Mobile merger. J.P. Morgan shares have fallen from their best levels in the wake of the antitrust suit. The bank is the lead underwriter of the proposed merger between AT&T and T-Mobile. Verizon (NYSE: VZ) shares are also falling, down 1.54% to $35.75.