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November 23, 2011 3:22 PM

Antitrust Roundup: FCC Moves Against AT&T/T-Mobile Deal; Cleary Wins EU Okay For Western Digitial

Posted by Brian Baxter

UPDATE: 11/27/11, 12:25 p.m., EST: The New York Times reports that AT&T and T-Mobile USA have responded to the FCC's move to block their proposed merger by withdrawing their application seeking FCC approval of the tie-up. According to The Times, the companies will focus their efforts instead on winning a federal antitrust suit filed in opposition to the merger, and AT&T will take a $4 billion charge against earnings to reflect the breakup fee the company must pay T-Mobile's parent Deutsche Telekom if the deal collapses.

The Federal Communications Commission and the European Commission are keeping antitrust litigators from Am Law 200 firms busy as they seek regulatory approval for a pair of billion-dollar mergers.

On Tuesday, Julius Genachowski, a former Harvard Law School classmate of President Obama and the current chair of the Federal Communications Commission, moved to block the proposed $39 billion merger between AT&T and T-Mobile USA announced earlier this year.

The New York Times and The Washington Post report that the FCC opposes the merger as both an anti-competitive blow to consumers and a job-killing threat to telecommunications sector workers. On Tuesday, Genachowski asked agency commissioners to send the merger proposal to an FCC judge for a hearing, according to Bloomberg. It's the first time since 2002—when regulators moved to block a merger between DirecTV and EchoStar—that the FCC has intervened in this way.

The Am Law Daily has previously reported on the legions of lawyers advising AT&T and T-Mobile in their effort to achieve regulatory approval of the merger. The ranks of attorneys working on the matter swelled in August, when the Justice Department filed an antitrust suit against AT&T, T-Mobile, and T-Mobile's German parent, Deutsche Telekom, seeking to scuttle the merger.

In AT&T's corner are its deal counsel from Sullivan & Cromwell, antitrust counsel Arnold & Porter and Crowell & Moring, FCC counsel Wilmer Cutler Pickering Hale and Dorr, and additional regulatory and litigation counsel in Sidley Austin and Kellogg, Huber, Hansen, Todd, Evans & Figel. T-Mobile has turned to Wachtell, Lipton, Rosen & Katz for deal counsel, Cleary Gottlieb Steen & Hamilton for antitrust counsel, Wiley Rein for FCC counsel, and O'Melveny & Myers to represent it in litigation against the government.

U.S. Attorney General Eric Holder, Jr., said earlier this month that the Justice Department looks forward to taking the case to trial , an event tentatively set to start February 13. Reuters reported earlier this month that a schedule has been set for the roughly 35 witnesses from each side who will testify in the proceeding.

This week, The Wall Street Journal profiled former Simpson Thacher & Bartlett partner Joseph Wayland, who left the firm a year ago to become deputy assistant attorney general for antitrust. In that post, Wayland is leading the government's trial team for the AT&T-T-Mobile case. Joining Wayland as cocounsel on the government's antitrust team, as reported by The Am Law Daily last month, are former Munger, Tolles & Olson litigation partners Glenn Pomerantz and David Dinielli. The two resigned their positions at the firm to work with the Justice Department.

While regulatory resistance to the AT&T deal grows stronger in the U.S., another major deal announced earlier this year has been blessed by the European Commission.

On Wednesday the commission announced it had approved Western Digital's $4.3 billion acquisition of Hitachi Global Storage Technologies. Cleary competition partner Francisco Enrique Gonzalez-Diaz in Brussels and antitrust partners George Cary and Jeremy Calsyn in Washington, D.C., represented Western Digital in securing European antitrust clearance for the transaction.

Western Digital announced in March that it had agreed to purchase Hitachi’s data storage unit for $3.5 billion in cash and $750 million in stock. According to our previous reports, O'Melveny served as deal counsel to Lake Forest, California–based Western Digital, which makes hard disk drives and storage units.

Morrison & Foerster and Skadden, Arps, Slate, Meagher & Flom are serving as deal counsel to Hitachi. Both firms have previously advised Hitachi, a Tokyo-based company, on several major transactions.

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