US DOJ to Appeal Approval of AT&T Acquisition of Time Warner

Andrew Cummings
July 15, 2018

The Justice Department sued to block the deal from going through in November of 2017, arguing that it would limit competition and raise prices.

The deal, which has been almost two years in the making, was approved by Judge Richard Leon just one month ago.

Rough waters ahead: Imagine the logistical nightmare that would ensue if AT&T's mega merger with Time Warner were to be undone.

AT&T is a phone, cable and satellite company, and the biggest pay TV provider in the U.S. - claiming about 25 million of the approximately 90 million U.S. households that are pay TV customers. But the DOJ is appealing the judge's ruling to the United States Court of Appeals for the District of Columbia Circuit, the DOJ said in a court filing today.

AT&T and Time Warner have already closed the deal, but AT&T is managing the Turner network separately from DirecTV and U-Verse.

As a candidate for president, Donald Trump said he opposed the tie-up, saying it would lead to "too much concentration of power in the hands of too few".

But exactly a month ago, a district court judge decided that the government hadn't established that the deal would significantly decrease competition.

"The Court's [June 12] decision could hardly have been more thorough, fact-based, and well-reasoned", noted David McAtee, AT&T General Counsel, in a statement posted on the operator's website late Thursday. Still, the Justice Department apparently believes it has an adequate legal basis to show an error in Leon's ruling, Schaeffer said. AT&T said it was surprised by the decision and would defend the merger in court again.

AT&T's stock fell by more than 1.4 percent in after-hours trading.

AT&T also said that in the short term, it would have no role in setting Turner prices and the number of Turner employees and target compensation and benefits would remain "largely unchanged".

The ruling was seen as a green light for other companies to pursue mergers, and in the ensuing months, bidding wars have erupted between Comcast and Disney for big chunk of 21st Century Fox's assets.

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