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$85 Billion Acquisition Of Time Warner Closed By AT&T A Day After Court Ruling In Its Favor


06/15/2018


$85 Billion Acquisition Of Time Warner Closed By AT&T A Day After Court Ruling In Its Favor
Following indications that no delay is being sought by U.S. antitrust regulators, the $85 billion deal to acquire media company Time Warner Inc was closed on Thursday by AT&T Inc which is the second largest wireless carrier in the U.S.
 
President Donald Trump had opposed the deal after it was announced in October 2016. AT&T was subsequently taken to court by the Justice Department opposing the deal but the company got a favorable ruling just a day ago which allowed it to go forwards with the acquisition. The deal was delayed for six weeks because of the trial.
 
Despite the deal being closed, there is a period of 60 days available with the Justice Department to appeal the decision by U.S. District Judge Richard Leon.
 
The deal that would have seen the combination of Time Warner’s movies and television business and AT&T’s wireless and satellite businesses was deemed to be well within the legal boundaries of anti-trust laws, Leon of the U.S. District Court for the District of Columbia had ruled on Tuesday. The argument of the Justice Department was that the deal would be harmful for customers.
 
The deal was denounced by U.S. President Donald Trump who is a frequent critic of Time Warner’s CNN coverage.
 
The owning of AT&T of both DirecTV and Time Warner – including the Turner subsidiary, would empower AT&T with resources that would provide unfair leverage against competing pay TV providers which are dependent on contents and software such as CNN and HBO’s “Game of Thrones”, the Justice Department had argued in the law suit that was filed by it in November 2017 and was aimed at stopping preventing the deal from happening.
 
The market is also expecting a wave of merger in the media industry following the AT&T ruling specifically at a time when the industry has been shaken up by online content providers such as Netflix Inc and Alphabet Inc’s Google.
 
The first merger activity following the ruling was afresh bid of $65 billion by Comcast Corp on Wednesday for the acquisition of the entertainment assets of Twenty-First Century Fox Inc.
 
There was apprehension within AT&T about the closure of the deal before the June 21 deadline for the closure of the merger because of the possibility of the government winning a stay order pending an appeal. In such an eventuality, the June 21 deadline would have been crossed and it would have bene possible for Time Warner to pull away from the deal and start a fresh round of negotiation with AT&T to sweeten the deal.
 
“I don’t think this would be overturned. It is so rooted in the facts that I would be surprised if an appellate court overturned such a fact-laden opinion,” said Michael Carrier, who teaches law at Rutgers.
 
Leon, who was particularly critical of the government stand on the deal, urged the government not to request for a stay on the order pending a potential appeal and said that it would be "manifestly unjust" to seek such an order and that such an order would be unlikely. Leon further noted that the any form of competitive harm arising out of the deal was not shown bv the government in it’s argument.
 
(Source:www.reuters.com)