Tuesday, 16 October, 2018

United States judge clears AT&T merger with Time Warner

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Ginger Lawrence | 13 June, 2018, 02:28

For example, Comcast is reportedly eager to gobble up some of 21st Century Fox's assets. The deals come at a time when traditional media and internet service providers see online giants like Google and Facebook as the key competitive threat.

The deal, almost two years in the making, netted a massive and potentially legacy-sealing win for AT&T chief executive Randall Stephenson. It's already purchased satellite TV provider DirecTV for almost $49 billion.

The U.S. Justice Department is taking AT&T to court.

The lawyer added that the merger would be completed no later than June 20 of this year. The Justice Department even sued to block it, but Judge Leon saw things a bit differently.

"We are gratified that the court's decision to categorically reject the government's bid to block this historic merger", he said.

The DOJ has argued that this type of consolidation would give the merged AT&T-Time Warner the ability to raise prices, thwarting the competition's ability to compete by forcing them to raise prices to maintain carriage rights.

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. The Walt Disney Company is also looking to make an offer on the company.

Vertical integration FTW, said Phillip Fresen, managing director of investment bank Garros Group.

In making its case, the US government argued that the merger of AT&T could harm consumers in a number of ways.

Time Warner controls assets such as HBO, CNN and, most importantly, Warner Bros. But now the government seems to have grown concerned about the massive reach of new telecommunications and tech companies that warehouse personal information on users and sell targeted advertisements, Mehra said.

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Media executives increasingly say that content creation and distribution must be married to survive against rising technology companies like Amazon and Netflix.

Amid the shifting media sands is a backdrop of intense competition in the wireless business.

But Salil K. Mehra, a professor at Temple's Beasley School of Law and an expert on antitrust, said "this is a fearless new world in which leverage issues and the data collection on individuals make it harder to predict what will happen".

"We want people engaged with their mobile devices all day watching movies and video", Stephenson said in April during the trial.

AT&T and Time Warner lead attorney Daniel Petrocelli said the companies are eager to put the court battle behind them. He said the company needed to take a giant leap into the content business.

Presidential politics clouded the merger from nearly the moment it was announced.

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. Sessions did not comply with the request.

"Completion of the transaction remains subject to customary closing conditions, including expiration of the federal Hart-Scott-Rodino antitrust waiting period and approvals of certain state departments of insurance and other regulators", Aetna said in a March release.

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".

AT&T's stock fell as much as 2.5% and shares were up as much as 5.3% to more than $100 per share in after-hours trading Tuesday.