A US Federal Judge Has Approved The AT&T-Time Warner Merger

Andrew Cummings
June 13, 2018

During Donald Trump's campaign for President in 2016, he said he would block the deal as President "because it's too much concentration of power in the hands of too few".

It was reported in May that Comcast was preparing a $60 billion all-cash bid for 21st Century Fox media assets that Disney already agreed to buy for $52 billion in stock.

"Consumers may not notice the difference if this one deal goes through because they are already getting crushed in the marketplace", added Susan Crawford, a professor at Harvard Law School and author of Captive Audience on the Comcast/NBCUniversal merger.

The case was closely followed by an industry amid other M&A deals.

"The court has spoken", U.S. District Judge Richard Leon said.

The DOJ also faced harsher questioning from the judge, who came off exasperated at times during the government's arguments. He also urged the government not to seek a stay when issuing his decision in a closed-door room with reporters.

Makan Delrahim, the Justice Department's top antitrust official, said the government was disappointed in the ruling and would "consider next steps".

Jayant said that Time Warner will have to give its blessing either way, either giving AT&T the OK to appeal if the DOJ wins or giving AT&T the OK to extend the merger deadline if AT&T wins and the DOJ appeals.

Fox's stock rocketed in after-hours trading, rising 7% to $43.42 tonight, in a sign that Wall Street expects the USA cable giant to challenge The Walt Disney Co. for the prized media asset, with its valuable global holdings, lucrative cinematic franchises and well-regarded cable networks. Meanwhile, both Comcast and 21st Century Fox also are vying for United Kingdom satellite operator Sky.

The Justice Department, which may still appeal the decision, sued the companies in November, arguing that the tie-up could be used to suppress competition and raise prices for consumers.

Months before Trump nominated him to the Justice Department's leading antitrust position in 2017, Delrahim even had expressed an openness to the combination of AT&T and Time Warner, predicting in an interview on Canadian television that it might not trigger any regulatory concerns. The Judge has put no conditions on the merger. "Should be interesting, although I certainly wouldn't count Disney out".

"While it does not open the door for other types of consolidation plays, deals in the media industry have occurred in waves, and we should expect more", Fresen said.

The government argued that AT&T would gain outsize market power, jacking up the prices it charges cable providers to carry networks in the Time Warner stable.

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner", said David McAtee, AT&T General Counsel.

Still, one potential target for Verizon would be a combined CBS Corp and Viacom Inc, analysts have said, assuming that on ongoing legal battle between CBS's controlling shareholder, Shari Redstone, and the company's board, is resolved.

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