Published: Wed, June 13, 2018
Economy | By

Judge clears AT&T takeover of Time Warner

Judge clears AT&T takeover of Time Warner

However, AT&T has argued that making such a deal would be necessary to compete against other tech companies. The favorable decision, in a rebuke of the Justice Department's case opposing the deal, is viewed as a green light for other major M&A moves - and several scenarios are already in play.

Time Warner controls assets such as HBO, CNN and, most importantly, Warner Bros.

"We are disappointed with the Court's decision today", a spokesperson for the agency said in a statement. It could tie products together, offering AT&T phone customers free access to Time Warner offerings, squeezing out competitors that do not own media companies. The $85 billion deal can now proceed. He has indeed ruled in favor of the merger, despite government opposition.

Twenty-First Century Fox jumped 7 percent in extended trade after the ruling on expectations that Comcast and Walt Disney Co could start a bidding war to acquire its media assets. Fox stock jumped more than 6% in after-hours trading following the ruling.

"Regardless of what happens on the appeal front, expect Comcast to put forth an all-cash bid in the next day or so at a premium to Disney", said Mary Ann Halford, senior adviser to OC&C Strategy Consultants.

A Comcast spokesperson declined to comment. Last fall, he presented AT&T and Time Warner with two options: Sell the majority stake in either DirecTV or Turner Broadcasting. In fact, CNNMoney reported that AT&T-Time Warner's counsel Daniel Petrocelli made the argument that traditional media orgs have already been left behind in the digital revolution.


AT&T, for its part, insists that legacy media companies can't compete with the rising titans of Amazon and Netflix unless they're allowed to bring content creation and distribution under the same roof.

The opinion comes 20 months after AT&T announced its plans to buy Time Warner in a transaction then worth nearly $85bn. It is, he said then, "a deal we will not approve in my administration because it's too much concentration of power in hands of too few".

The decision by Judge Richard Leon is a setback for Makan Delrahim, President Trump appointee to the top spot in the Justice Department's antitrust division, challenging his view of antitrust laws in the digital era.

After almost two years, AT&T is on the cusp of completing its acquisition of Time Warner, a deal it struck in a bid to become an entertainment giant that can feed Time Warner programming like HBO and CNN to its 119 million mobile, internet and video customers. And Leon's decision is likely to trigger a wave of new mergers, as many executives were waiting to for the outcome of AT&T's bid before pushing forward with their desired deals.

During the trial, the judge heard from dozens of witnesses, including AT&T CEO Randall Stephenson and Time Warner CEO Jeffrey Bewkes. Looming in the background of the deal has been Trump's long-running feud with Time Warner's CNN, which he has often derided as "failing" and a purveyor of "fake news". But Leon blocked discovery on certain White House communications AT&T and Time Warner sought, and ultimately the companies dropped that defense, choosing to litigate the case on pure anti-trust grounds.

Like this: