Published: Thu, June 14, 2018
Markets | By Erika Turner

AT&T can buy Time Warner as judge shuts down Department of Justice

AT&T can buy Time Warner as judge shuts down Department of Justice

In after-market trading following the ruling, shares of Time Warner rose almost 5 percent and AT&T shares fell 1.6 percent. "We are in our minds the right buyer with the superior proposal and as much or better certainty and commitments and safeguards for Fox and the Fox board that are the same as those provided by Disney". After Fox made a takeover offer for the 61 percent stake in Sky that it doesn't already own, Comcast launched a 22 billion pound (US$30 billion) counterbid for the business. "Opposition to the Time Warner acquisition marked an aggressive turn by the Justice Department, but one that could be short-lived if Leon rules against the government". In the past, the DoJ has come to an agreement with companies engaging in a contentious merger, setting conditions that must be respected in order for the deal to be completed. They have been increasingly calling for the government to break up Silicon Valley giants like Google, Facebook and Amazon and to prevent greater consolidation in health care, media, transportation and agriculture.

The judge made his remarks to a packed courtroom in an unusual session weeks after the trial ended. He has also discouraged the government agency from pursuing a stay of his decision if it will pursue an appeal.

The companies have until June 21 to close the merger, per their previously set deadline.

Wednesday's announcement comes a day after a USA federal judge cleared AT&T's $85bn takeover of Time Warner.

Tuesday's ruling signaled that federal regulators will have a hard time stopping companies from getting bigger by gobbling up rivals and the programming they own. The statement confirmed also Comcast's bid for "the Twentieth Century Fox Film and Television studios, along with cable and worldwide TV businesses".

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For months, we've been building up this $52.4 billion-plus deal that would result in Disney acquiring most of 21st Century Fox's assets. AT&T's favorable ruling would seem to clear any regulatory hesitation.

But a court ruling this week on a similar merger may have alleviated those worries.

Judge Leon rejected that argument earlier this year. Fox shares spiked on news of the judge's decision. AT&T has said it expects to find $1 billion in synergies in the first three years of the deal.

To see how this could happen, consider that, after the merger, AT&T would have the rights to all of HBO's output, CNN, live National Basketball Association and NCAA broadcasts, and many more desirable Time Warner properties. AT&T did not immediately respond to a request for comment.

AT&T and Time Warner's lead lawyer, Daniel Petrocelli, said outside court that the companies were gratified and relieved. The Justice Department had argued that letting AT&T (a content distributor) combine with Time Warner (a content creator) would reduce competition between the mobile-phone giant and its rivals, and thus, hurt consumers.

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