US deal remedies offer hope to AT&T

Conventional wisdom in Washington is that big corporate mergers are harder to get past regulators when the Democrats are in power, but President Barack Obama’s administration has shaken this assumption.

Instead of blocking major deals outright it has sought to heavily modify them. For this reason, analysts in Washington are largely sanguine about the chance of AT&T’s proposed $39bn acquisition of Deutsche Telekom’s T-Mobile USA division securing clearance from the Department of Justice and Federal Communications Commission. On President watch, two of the largest and most controversial deals for decades have been approved but with heavy “remedies”, or conditions which must be met by the companies for the transactions to obtain regulatory clearance. “One significant difference between this and the previous administration is that under Bush the DoJ was much more likely to [let a deal] go through unfettered, or challenge it and block it,” says John Taladay, an antitrust lawyer at Howrey. “They weren't as likely to cut deals. The [Obama] administration has been a little more inclined to accept partial remedies to let deals go through.” Michael Sohn, a leading antitrust lawyer at Davis Polk, agrees. “I believe it is harder to clear a merger without remedies now than it was during the prior administration,” he says.