Judge Approves AT&T’s Acquisition of Time Warner

Judge Approves AT&T’s Acquisition of Time Warner

AT&T, Time Warner

On Tuesday, June 12, 2018, a federal judge approved the AT&T acquisition of Time Warner.

U.S. District Judge Richard Leon ruled that the acquisition would not be a danger to consumers. The decision was a win for both companies. It was decided that AT&T can purchase all of Time Warner without any conditions. AT&T can sell certain assets and did not have to agree to not raise prices. Analysts expected AT&T to win the case but under certain measures.

The judge has been listening to arguments on both sides of the deal for the last few months. AT&T and Time Warner argued the merger would be a positive deal for consumers, because they would be able to compete against large technology companies, such as Facebook and Google.

Along with the support of Donald Trump, the Department of Justice opposed the merger. They argued that AT&T and Time Warner would become too powerful and would reduce competition.

The Antitrust Chief of the DOJ Mekan Delrahim released a statement saying that the DOJ was disappointed, however, they will “closely review the Court’s opinion and consider next steps.” These leaves things open for an appeal.

The merger will create one of the most powerful companies in global media, combining the widespread distribution of AT&T and the gems of Time Warner, which includes Warner Bros., HBO, CNN, TBS, and TNT.

Executive Vice President of Time Warner, Gary Ginsberg, said that he was happy with the Court decision. He said the company was grateful the Court saw that the case was political and should have not been brought to Court. Ginsberg stated that Time Warner CEO Jeff Bewkes is also happy and relieved with the acquisition.

Now that the merger has been approved, more deals are expected that could potentially redraw the landscape of media and marketing.

It is expected that Comcast will now make a bid for elements of 21st Century Fox. Disney has already made arrangements to purchase some of 21st Century Fox’s entertainment assets.

The judge’s decision has opened the doors for other large acquisitions. CVS Health is ready to merge with Aetna and Cigna to become Express Scripts. T-Mobile is also making a deal to purchase Sprint.

A partner at Revolution Growth, an equity investment firm, Todd Klein, said this acquisition will ignite another round of mergers that could include MGM, Lionsgate, and Sony, but it is really a prelude to larger deals with tech companies.

Klein stated, “There is euphoria now, but in five years all these companies will be owned by Google, Alibaba, Facebook, or Amazon. All these media companies are fighting with each other, but they’ll all be subsidiaries of other companies.”

Globally, AT&T and Time Warner are some of the biggest buyers of advertising. They spend billions of dollars to market their products. In the first three years, AT&T plans to find $1 billion in synergies.

The ruling that approved the acquisition attracted criticism from some Democrats. Senator Edward J. Markey, D-Mass., believes the deal will hurt consumers. He said, “The telecommunications market needs more competition, not more consolidation.”

AT&T said the acquisition of Time Warner will allow the company to offer service bundles and improve mobile experiences, including offering free access to cable channels to customers of AT&T.

By Jeanette Smith

Source:

NBC News: AT&T wins: Judge approves $85.4 billion Time Warner acquisition

Featured Image Courtesy of Mike Mozart’s Flickr Page – Creative Commons License
Top Image Courtesy of Teri Tynes’ Flickr Page – Creative Commons License

 

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