Saturday, 23 June, 2018


Here’s why the AT&T-Time Warner merger just got approved

Judge approves landmark $85 billion AT&T-Time Warner merger, paving way for T-Mobile-Sprint deal US Court Approves $85Bln AT&T Merger With CNN Owner Time Warner
Hannah Rogers | 13 June, 2018, 23:48

Shares of AT&T were about flat in after-hours trade following the decision, while Time Warner rose more than 5 percent.

Bloomberg: The AT&T Ruling Could Change How Mega Deals Are Made - "For years, these so-called vertical deals have typically received light treatment from antitrust enforcers, unlike the horizontal mergers that bring together direct competitors".

Reuters reported that the merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. For more, RT America's Manila Chan is joined by former Florida Democratic Party Chair Mitch Ceasar and GOP Strategist Ken Del Vecchio.

However, to get the deal done, AT&T might find itself having to pay up this time around as market volatility has increased, with average high-grade bond spreads widening by over 10bp. Comcast, for example, would like to outbid the Walt Disney Co. for some of 21st Century Fox's assets, but has held off until the trial ended. Ultimately, the government argued this would harm competition and innovation as well as raise prices for consumers. Online companies like Amazon, Google and Netflix have emerged as alternatives to the cable industry both distributing and creating their own content.

In addition, T-Mobile and Sprint are direct competitors, so their merger is perhaps more likely to be seen as anti-competitive than a union of AT&T and Time Warner.

Time Warner owns CNN, HBO, home to Game of Thrones and Veep, and Warner Brothers, whose franchises included Batman, the Lego movies and Harry Potter.

"This is a disappointing result, and we expect the government will appeal", Public Knowledge Senior Counsel John Bergmayer said.

His 172-page decision delivered a stinging defeat to Trump administration's Justice Department while opening the door for Comcast Corp.to bid for parts of 21st Century Fox and become an worldwide company. But now the government seems to have grown concerned about the massive reach of new telecommunications and tech companies that warehouse personal information on users and sell targeted advertisements, Mehra said.

AT&T and Time Warner announced their deal on October 22, 2016, in the midst of the bitterly contested presidential campaign between Donald Trump and Hillary Clinton.

If he does not approve the deal, AT&T is expected to keep fighting.

AT&T-Time Warner is considered a vertical merger, as AT&T is a content distributor and Time Warner is a content creator.

It's also worth noting that President Trump has been publicly opposed to the deal since he was on the campaign trail.

President Donald Trump also once weighed in on the deal, commenting that an AT&T victory would put too much power "in the hands of too few" ― but many speculated that his aversion to the merger had more to do with his issues with CNN than anything else (Turner Broadcasting is CNN's parent company).

The trial was closely watched as the fate of the deal could have had ripple effects on future deals and everyone from media giants to streaming service providers.

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