Published: Wed, June 13, 2018
Finance | By Claude Patterson

Judge approves AT&T's merger with Time Warner | AT&T

Judge approves AT&T's merger with Time Warner | AT&T

AT&T and Time Warner are not competitors; theirs would be a "vertical integration" of complementary companies: Time Warner makes the TV shows (and movies and news programming and so forth), while AT&T offers the satellite and cable TV services and mobile phone systems on which people consume such content.

Leaving the courtroom, Makan Delrahim, head of the Justice department's antitrust division, said that he would read the judge's opinion before making a decision on an appeal. The companies then entered into discussions with the DOJ a year ago and rumors surfaced that the agency had suggested some divestitures in order for AT&T to avoid an antitrust lawsuit.

AT&T on Tuesday won the right to buy Time Warner and its deep reservoir of programming for $85 billion.

The case has drawn attention from all sides including Sling TV's President Warren Schlichting, who testified against the merger.

U.S. District Judge Richard Leon announced in court Tuesday his decision in the biggest antitrust trial in years. "It would be a lose/lose for us, and a win/win for them".

The acquisition means AT&T will be the nation's top pay-TV distributor. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers.

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Leon said the government had "taken its best shot" to oppose the merger.

Using unusually strong language, Leon said it would be "manifestly unjust" for the government to ask him to put his own ruling on hold, because if he were to do so, it could have the effect of killing the deal, which has a deadline for completion of June 21. He rejected the government's argument that it would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.

The Justice Department has not brought a suit seeking to stop a vertical merger - whereby companies operating in different spaces combine - since 1979.

Some thought Trump had pressed for the lawsuit because of his animus toward Time Warner's CNN.

In a recent court filing, Redstone said her long-term plan was to create a combined company, which would unite media assets including CBS" broadcast networks, Showtime, MTV, Comedy Central and Nickelodeon, and then sell it. Halford, from OCC added, "All I know is that this will be a blockbuster summer for media mergers!' President Donald Trump, while still a candidate, said he would block the deal "because it's too much concentration of power in the hands of too few". The companies' CEOs, AT&T's Randall Stephenson and Jeffrey Bewkes of Time Warner Inc., testified in support of the deal.

"We think the evidence throughout the trial was quite clear and we're very pleased that the court saw it the same way", said Daniel Petrocelli, AT&T's lawyer. The combination would push technology forward and give consumers more choices, AT&T has promised. That leverage would allow AT&T to raise prices for Time Warner content, with those costs being passed on to consumers, according to the Justice Department.

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