Judge clears AT&T takeover of Time Warner
US court sides with two corporate giants in landmark antitrust litigation
NEW YORK, NY - JUNE 12: Traffic moves past the Time Warner Center, June 12, 2018 in New York City. A federal judge today said that AT&T can move forward with its $85 billion acquisition of Time Warner, which the U.S. Justice Department had sought to block. (Photo by Drew Angerer/Getty Images)
A US federal judge on Tuesday approved the blockbuster merger between AT&T and Time Warner, rebuffing the US government’s effort to stop the $85.4 billion (€72.8 billion) deal, in a decision that is expected to unleash a wave of corporate takeovers.
The judge said the Justice Department had not proved that the telecom company’s acquisition of Time Warner would lead to fewer choices for consumers and higher prices for television and internet services.
The merger would create a media and telecommunications powerhouse, reshaping the landscape of those industries. The combined company would have a library that includes HBO’s hit Game of Thrones and channels like CNN, along with vast distribution reach through wireless and satellite television services across the US.
Media executives increasingly say content creation and distribution must be married to survive against technology companies like Amazon and Netflix. Those companies started producing their own shows in just the last several years. But they now spend billions of dollars a year on original programming, and users can stream the video on apps in homes and on mobile devices, putting pressure on traditional media businesses.
Executives and investors of other companies had watched the six-week trial closely for signs about how it might affect their ambitions. Comcast, for example, would like to beat out the Walt Disney Co. for some of 21st Century Fox’s assets, but has held off from making a formal bid until the trial ended.
“If there ever were an antitrust case where the parties had a dramatically different assessment of the current state of the relevant market and a fundamentally different vision of its future development, this is the one,” Judge Richard J Leon of the District Court in Washington wrote in his opinion.
The ruling is a major setback for the Justice Department and its antitrust chief, Makan Delrahim, whose decision to sue to block the merger broke with convention. Deals such as this one, in which the two companies are in related industries but do not produce competing products, are usually approved by federal regulators.
Delrahim had insisted that the two companies sell some major parts before getting government approval, a demand that the executives rejected. That led to the Justice Department file its lawsuit in November. The judge’s decision essentially confirmed the conventional thinking about antitrust law. – The New York Times News Service