AT&T has hired Bank of America’s Merrill Lynch to advise it on the sale of as much as $8 billion in assets in an effort to gain the government’s approval of its planned T-Mobile acquisition. According to The Wall Street Journal, AT&T will try to sell off its network assets in an attempt water down its market power, but most of of the assets could actually be T-Mobile’s holdings. “As we said on the day we announced the merger with T-Mobile USA, we anticipate there will be some divestitures, as we have had in past mergers, but any speculation about the amount of divestitures is premature,” an AT&T spokesperson told The Journal. On Monday, the Federal Communications Commission pumped the brakes on the merger when it announced that it will roll in AT&T’s planned acquisition of Qualcomm’s FLOTV spectrum into its overall decision on the T-Mobile purchase. AT&T has said that the acquisition is on schedule for approval in March of next year.
Sprint is openly opposed to AT&T’s proposed $39 billion acquisition of T-Mobile, but the scrappy carrier stands to benefit from the deal according to Piper Jaffray analyst Christopher Larsen. Larsen on Friday lifted his rating on Sprint stock from neutral to overweight, while also upping his price target from $5 to $6.50. The analyst sees brighter days ahead for the carrier through the rest of 2011 and 2012 as well, and he also believes the AT&T / T-Mobile deal could be a good thing for Sprint. Larsen thinks the merger could cause some subscribers to leave the new mega-carrier and flee to Sprint. Beyond that, AT&T may be required to divest some markets in order for the deal to be approved, and Sprint may very well pick up that business or even some of AT&T’s spectrum if it is forced to let some go. Finally, the analyst also believes a post-merger market would be less prone to aggressive price cutting, which would certainly help Sprint maintain a competitive advantage. More →