Antitrust Judge Approves AT&T-Time Warner Merger

13 June, 2018, 06:14 | Author: Sally Reid
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Moments after a federal judge cleared AT&T's $85 billion bid for Time Warner Tuesday, acquisition targets saw their stocks trade sharply upwards after hours, hinting at a merger-friendly playing field.

The Times also notes that the companies have a June 21 deadline to merge and that the judge, Richard J. Leon, of the United States District Court in Washington, flat out told the feds not to try to seek an emergency stay of the decision due to the harms on the defendants who have battling for 18 months to get the merger approved.

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

The Justice Department's main argument against the merger was that by owning Time Warner's content, which includes must-have channels like CNN, AT&T could raise prices for pay-TV rivals and keep costs prohibitive for online streaming services. Most analysts believe that the decision is likely to set off a wave of takeovers and consolidation in tech, telecom, and media.

Beyond media and telecom, the ruling could affect the Justice Department's stance toward other big deals in the works, such as CVS's proposed purchase of Aetna.

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

Analysts say the decision will bolster firms such as Comcast - which is considering bidding for 21st Century Fox assets, including its stake in Sky, in a challenge to a deal announced between Fox and Disney a year ago. Remember, Time Warner owns CNN, which is the object of some of Trump's most focused hatred.

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Leon ruled that AT&T can buy all of Time Warner without any conditions, such as selling certain assets or agreeing to refrain from raising prices.

AT&T said it needed Time Warner to survive in a rapidly changing media landscape, especially to compete against giants like Netflix and Amazon.

AT&T was originally sued by the U.S. Justice Department for trying to buy Time Warner, and if it wants to, the Department has the option of making an appeal before AT&T moves to complete the deal six days from now. The combination would push technology forward and give consumers more choices, AT&T has promised. "We will closely review the Court's opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers", Delrahm added in a statement.

Time Warner's sale could shape how much USA consumers pay for streaming TV and movies.

Experts have said that the DOJ attorneys may have been somewhat hamstrung by the fact that AT&T's acquisition of Time Warner is somewhat unusual.

AT&T has argued that a merger consolidating control over both sides of content operations would enable it to collect valuable customer data, which it could then use to sell high-priced targeted advertising. Stephenson was relieved. So was outgoing Time Warner CEO Jeff Bewkes, who also learned the news from a phone call. Trump had pledged to block the deal when he was campaigning for president.

The White House did not immediately respond to a request for comment.

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