Judge Approves AT&T/Time Warner Merger
• Almost 20 months after AT&T first announced its $85 billion intention to acquire Time Warner, the companies could be less than six days away from joining forces after a federal judge ruled in AT&T’s favor late Tuesday, ruling that the Justice Department’s antitrust suit had failed to make its case against the merger and handing the telecom giant a massive victory that could hamper the ambitions of U.S. regulators seeking to block other major corporate mergers.
AdWeek reports U.S. District Judge Richard Leon approved the AT&T-Time Warner deal with no conditions. Leon has also said that should the DOJ ask for a stay, he would deny the request. The ruling not only hastens the merger, but also sends a ripple effect through the entertainment and tech industries, leading to several other megadeals as Silicon Valley and Hollywood companies add scale to compete with Netflix, Google and Facebook. First up will be the pending $52.4 billion Disney-Fox union, which could now be upended by Comcast’s efforts to swoop in and snap up 21st Century Fox with a $60 billion all-cash rival bid of its own. “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’s General Counsel. “We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”
During the 30 minutes he spent reading his opinion in court, Judge Leon advised the government notto appeal his ruling, as it would likely kill the deal: AT&T and Time Warner’s merger agreement is set to expire on June 21. Time Warner will receive a $500 million breakup fee if the merger does not go forward.
It was October 2016 when AT&T initially announced it would be acquiring Time Warner in a $85 billion megadeal that would combine Time Warner’s hefty film and TV properties (Warner Bros., HBO, TNT, TBS and CNN) and AT&T’s robust broadband (U-verse), wireless (AT&T), satellite (DirecTV) and streaming live TV (DirecTV Now) offerings. Time Warner’s stock rose nearly 5 percent in after-market trading. AT&T’s stock was down about 2 percent.
