AT&T wins’ court approval to buy Time Warner over Trump opposition

 WASHINGTON (Reuters) – On Tuesday, June 12, 2018- AT&T Inc. won court approval to buy Time Warner Inc. for $85 billion, after neglecting an attempt by U.S. President Donald Trump’s administration to block the deal and likely setting off a wave of corporate mergers.

The deal, which could close till next week, is seen to form a turning point for a media industry, which has been upended by companies like Netflix Inc and Alphabet Inc’s Google which produce content and sell it online directly to consumers, without requiring a pricey cable subscription. Cable, satellite and wireless carriers all see buying content companies as a way to add revenue.

“That’s a legal shocker,” added J.B. Heaton, an attorney, and consultant on litigation and regulatory proceedings. He said, “I think we’ll see now that companies will be much more confident about vertical mergers,” he added, referring to deals where a company merges with a supplier. Shares of AT&T decreased about 1.3 percent in after-hours trade following the decision, while Time Warner rose more than 5 percent.

Twenty-First Century Fox increased by around 7 % in trade, after the ruling on expectations that Comcast and Walt Disney Co. could begin a bidding war to conquer its media assets. Comcast and Walt Disney also faced a fall of around 4.3% and 1.8%.

Mary Ann Halford, senior adviser to OC&C Strategy Consultant said, “This will be a blockbuster summer for media mergers”. Senator Richard Blumenthal, the Democrat, in a statement said, “Consumers should fear a cascade of unchecked mergers and acquisitions to further consolidate the telecom industry resulting in less choice, fewer competitors, and higher prices”.

The Justice Department, filed a lawsuit to defend the deal in November 2017, replying that ‘AT&T’s ownership of both DirecTV and Time Warner would give AT&T unfair leverage against rival cable providers that relied on Time Warner’s content, such as CNN and HBO’s “Game of Thrones”.

by Sawan Kumar on June 13, 2018

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