Friday, July 13, 2018

DOJ Wants AT&T-Time Warner Merger ReDo

The Justice Department is trying to undo AT&T Inc.’s purchase of Time Warner Inc., appealing the ruling that last month struck down one of the era’s highest-profile antitrust challenges, according to The Wall Street Journal.

The government initiated the appeal Thursday with a two-page notice in federal court, a month after U.S. District Judge Richard Leon rejected Justice Department arguments that the more than $80 billion cash-and-stock deal would suppress competition in the pay-TV industry.

AT&T closed the acquisition a short time after Judge Leon’s ruling, but agreed to keep Time Warner’s cable networks in a business unit separate from AT&T’s communication assets for now, in case the government chose to appeal.

The appeal won’t change anything at AT&T while the district court’s ruling remains in effect, but comes as an unwelcome distraction for the company, where executives were eager to plunge into the high-profile world of show business.

The matter now goes to the U.S. Court of Appeals for the District of Columbia Circuit, where a three-judge panel will consider the Justice Department’s claims that Judge Leon was incorrect. The appeals process could take many months, leaving lingering uncertainty over AT&T’s plans.

The Justice Department’s lawsuit against the merger was one of the most anticipated antitrust cases in a generation, and Judge Leon’s ruling was one of the department’s most stinging losses.

The NY Times reports the combination of the two companies has created a media and telecommunications giant with television stations, a movie studio, nearly 160 million wireless customers and a nationwide satellite television service, DirecTV. An AT&T executive is already in charge of Time Warner properties like HBO and the news network CNN.

The judge’s decision had almost immediately set off a round of intense deal talks among many of the biggest names in the industry, including Comcast and 21st Century Fox. Many media executives, including those at AT&T and Time Warner, say mergers among their companies are necessary to better compete against tech giants like Netflix and Amazon.

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