People/Biz

Judge approves AT&T, Time Warner deal

The judicial green light has been given for AT&T’s acquisition of Time Warner. U.S. District Court judge Richard Leon okayed the acquisition, worth US$85.4 billion in cash and stocks, on Tuesday ...
June 12, 2018

The judicial green light has been given for AT&T’s acquisition of Time Warner.

U.S. District Court judge Richard Leon okayed the acquisition, worth US$85.4 billion in cash and stocks, on Tuesday (June 12), and imposed no conditions on the deal.

While the Department of Justice under U.S. President Donald Trump sued to prevent the transaction, the six-week trial ended with Leon ruling that the DOJ didn’t satisfactorily prove that the acquisition would harm competition.

“We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” said AT&T general counsel, David McAfee, in a statement. “We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government.

“We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative,” he added.

The Department of Justice could conceivably appeal the ruling or seek a stay pending an appeal. That move could prove problematic for the deal, which has a June 21 closing deadline. A stay could result in another party making a bid, or open up the possibility for Time Warner shareholders to put pressure on for a higher selling price.

AT&T will take control of Time Warner’s divisions, including Warner Bros. Entertainment, which consists of television, feature film, home video and video game production and distribution. The latter covers off many profitable film franchises, as well as a number of successful TV series, both scripted and unscripted (Little Big Shots, The Bachelor).

Also included under the deal are HBO, which consists of domestic premium pay television and streaming services (HBO Now, HBO Go), as well as international premium and basic pay services; and Turner’s U.S. and international basic cable networks including TNT, TBS, CNN, and Cartoon Network/Adult Swim. Turner also has the rights to the NBA, March Madness and MLB.

Time Warner also has investments in OTT and digital media properties such as Hulu, Bleacher Report, CNN.com and Fandango.

The go-ahead for the deal also potentially paves the way for further consolidation, with analysts predicting that Comcast will aggressively pursue a prepared bid for 21st Century Fox assets. Other network and production groups that have been bulking up as of late – such as Discovery and Lionsgate – may now be seen as viable acquisitions by larger entities, with speculation rife that global tech powerhouses such as Amazon or Google could soon enter the fray.

(With files from Jonathan Paul)

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