Published: Wed, June 13, 2018
Business | By Kate Woods

AT&T gets to buy Time Warner in legal win over Justice Department

AT&T gets to buy Time Warner in legal win over Justice Department

The oral opinion, slated to be delivered after 4 p.m. E.T.by U.S. District Judge Richard Leon, will cap the company's almost two-year battle to close its takeover of Time Warner Inc. "If it's narrow, like 'I don't think Time Warner content is that must-have, ' that may have implications in a similar merger in the telecommunications space but may not have a drastic effect in other vertical mergers", said Caroline Holland, who was in the Antitrust Division during the administration of former President Barack Obama.

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. In addition, T-Mobile and Sprint are direct competitors, so their merger is perhaps more likely to be seen as anti-competitive than a union of AT&T and Time Warner.

CNN is owned by Time Warner (TWX).

Judge Richard Leon rejected those arguments, approving the deal without conditions.

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The lawyer added that the merger would be completed no later than June 20 of this year.

The deal is set to unite AT&T's significant wireless, satellite television and internet business with Time Warner's media properties, which include HBO and CNN.

Now the judge overseeing the case has ruled that AT&T can merge with Time Warner.

Comcast reportedly is looking to make an offer to purchase 21st Century Fox the day after AT&T's merger comes into play.

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"We are disappointed that the court missed an opportunity to rein in the First Amendment-crushing mass media consolidation trend, which puts too much media power in the hands of too few", Manning said in a statement. And in order to stay competitive, AT&T's CEO Randall Stephenson said during the trial that it needed a big deal to survive.

The Justice Department had repeatedly suggested the judge consider forcing AT&T to divest some of Time Warner's cable channels. Trump had pledged to block the deal when he was campaigning for president. However, AT&T has argued that making such a deal would be necessary to compete against other tech companies. The government's star witness was Carl Shapiro, an economist at the University of California, who used an economic model to predict that consumer cable bills could rise by $500 million annually in aggregate by 2021. In fact, he suggested, consumers could end up paying less after a merger - maybe even $500 million less annually.

AT&T, which has invested heavily in a streaming video service called DirecTV Now, is free to bulk up its original programming with Time Warner content.

"The judge's sweeping rejection of the government's case doesn't surprise us at all", AT&T attorney Daniel Petrocelli told reporters outside of the courthouse shortly after the decision was issued. 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.

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