AT&T-Time Warner Merger Gets The Green Light From Federal Court

Postado Junho 13, 2018

A USA federal judge on Tuesday cleared the mega merger between AT&T and Time Warner in an antitrust case with potential far-reaching implications. The judge put no conditions on the deal. In recent decades, the government's antitrust enforcement actions have focused on deals where one company threatened to dominate too much of a specific industry.

The government can appeal the ruling, but Leon reportedly said that he would reject any government motion for a stay that would further delay the deal.

AT&T and Time Warner are not competitors; theirs would be a "vertical integration" of complementary companies: Time Warner makes the TV shows (and movies and news programming and so forth), while AT&T offers the satellite and cable TV services and mobile phone systems on which people consume such content.

"AT&T is buying Time Warner, and thus CNN", Trump said at a campaign rally in 2016. CNBC reports that Comcast will immediately move forward with its all-cash offer for 21st Century Fox assets if the judge approves the deal. He noted that Time Warner owned CNN, and then declared his opposition to the $85 billion proposed sale. That led to the Justice Department's lawsuit, filed in November. In February, Rep. Elijah E. Cummings, the ranking member of the House Committee on Oversight and Government Reform, and Rep. Gerald E. Connolly, the ranking member of the Subcommittee on Government Operations, sent a letter to Attorney General Jeff Sessions asking for documents and emails between the Justice Department and the White House about the decision to sue AT&T and Time Warner. A loss for AT&T and Time Warner could have signaled a new era of government scrutiny over so-called "vertical mergers" and could have halted attempts by companies like Disney, Fox and Comcast to announce their own megadeals. Judge Richard Leon rejected arguments by Justice Department lawyers that the combined company would be too large and too powerful and that the $85 billion deal would harm competition and hurt consumers. AT&T will now have a major foothold in the media industry. President Donald Trump, while still a candidate, said he would block the deal "because it's too much concentration of power in the hands of too few".

As president, Trump has called the merger "not good for the country" and said he believed it would push pay-TV prices higher.

AT&T and Time Warner said they need to combine in order to better compete with Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOG), companies that are already powerhouses in the content game.

As one carrot to get deal approval, AT&T CEO Randall Stephenson mentioned in court that AT&T will be debuting a new skinny streaming service in the near future.

"We are disappointed with the Court's decision today", a spokesperson for the agency said in a statement.

But AT&T rejected that idea, stating in a court filing that, "Divestitures here would destroy the very consumer value this merger is created to unlock".