In a ruling today by U.S. District Judge Richard Leon, AT&T will be permitted to move forward on an $85 billion deal to buy cable giant Time Warner. The U.S. Department of Justice had been trying to stop the deal, arguing the merger would violate antitrust laws by giving AT&T an unfair advantage over other cable providers.
Per a Fox News report, it is likely the federal government will file an appeal to continue its effort to keep the merger from happening. However, the judge cautioned against such action, noting the large amount of money AT&T laid out in legal fees to defend the deal. AT&T released a statement.
“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. We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government.”
In October 2016, AT&T finished negotiating a deal to buy Time Warner. Shortly thereafter, the Justice Department filed a lawsuit to stop the purchase. The government claimed allowing AT&T to control Time Warner would lead to reduced competition and higher prices for consumers. The Justice Department issued their own statement.
“We are disappointed with the court’s decision today. We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner.”
The AT&T-Time Warner antitrust ruling could have big implications for dealmakers and media companies. Here's why it matters. https://t.co/SmmZXzCbEa— The New York Times (@nytimes) June 12, 2018
AT&T, which also owns satellite TV provider DirecTV, will get control of Warner Bros. film studio and TV networks HBO and CNN as part of the merger. The deal should be complete in less than two weeks.
Both AT&T and Time Warner say the merger marks a significant change in the media industry. With more consumers cutting the cable cord and switching to streaming services like Netflix and Hulu, the deal will allow Time Warner to effectively compete by having access to AT&T’s enormous broadband and wireless customer base.
Today’s court decision in favor of AT&T will likely open the door to other huge telecom deals currently in the works. The pending acquisition of mobile provider Sprint by rival T-Mobile is less likely to be met with much opposition from the Justice Department now that a federal court decided to permit the completion of the AT&T-Time Warner deal.