AT&T Merger Approved
A federal judge approved AT&T;’s $85 billion purchase of Time Warner on Tuesday, handing the telecom giant a massive victory that could hamstring U.S. regulators seeking to block big corporate mergers.
The case – one of the most closely watched antitrust trials in decades – is viewed as a bellwether for other deals waiting in the wings. From Comcast’s potential bid for 21st Century Fox to CVS’s acquisition of Aetna, massive corporations increasingly have been seeking to expand their reach by buying up companies in different lines of business. The judge’s decision, which is allowing AT&T; to merge with Time Warner without conditions, shows the federal government may struggle to rein in such mergers.
“I think for business, in general, it’s going to be seen as a green light for mergers,” said Ed Black, president of the Computer and Communications Industry Association, a trade group in Washington that represents companies such as Amazon.com, Facebook and Google. “I think you’ll see a lot of people using it as an opportunity to push mergers they may have been thinking about.”
Speaking to reporters outside the courthouse, AT&T’s lead attorney, Daniel Petrocelli, described the decision as “a sound and proper rejection of all of the government’s arguments to stop this merger.” “We are elated,” Time Warner spokesman Gary Ginsberg said outside the courtroom. “We look forward to completing the merger.”
The Justice Department’s concerns about the merger focused heavily on its belief that AT&T would have the incentive and ability to use Time Warner’s Turner networks as a weapon against DirecTV’s cable and satellite television rivals. The department argued that AT&T, which bought DirecTV in 2015, would be able to use the threat of a Turner blackout to force rivals to pay higher carriage fees for the networks, which would mean higher prices for consumers.
Judge Leon disagreed, saying AT&T’s rivals could compete even if they didn’t have Turner. He also rejected two other government arguments: that AT&T might restrict rivals’ use of Time Warner’s HBO, and that the post-merger company could impede upstart online rivals offering video content on the internet.