AT&T defeats U.S. in merger fight to buy Time Warner
A U.S. appeals court approved wireless carrier AT&T Inc`s deal to buy media company Time Warner on Tuesday, a defeat for the U.S. Justice Department which had argued the $85.4 billion merger would mean higher prices for consumers.The three-judge panel on the U.S. Court of Appeals for the District of Columbia ruled unanimously in favor of the deal, setting the stage for the No. 2 U.S. wireless carrier to integrate its WarnerMedia business as well as its new Xandr advertising unit.
"The government’s objections that the district court misunderstood and misapplied economic principles and clearly erred in rejecting the quantitative model are unpersuasive," the judges said in their opinion.
The Justice Department had asked the court to declare the deal illegal, arguing that AT&T, which owns DirecTV, would use ownership of Time Warner’s content, such as CNN and HBO`s "Game of Thrones," to make pay-TV rivals pay more, thus raising prices for consumers.
The deal had been a target of criticism from U.S. President Donald Trump, also a frequent detractor of Time Warner’s CNN. It also marked a rare instance of the U.S. government seeking to stop a merger of a distributor and a supplier.
AT&T said it hoped that this ruling would end the court fight.
"While we respect the important role that the U.S. Department of Justice plays in the merger review process, we trust that today’s unanimous decision from the D.C. Circuit will end this litigation," said AT&T General Counsel David McAtee in a statement.
The Justice Department had no immediate comment.
AT&T shares were last up 0.2 percent in morning trade.
The merger, which was announced in October 2016, closed on June 14 shortly after Judge Richard Leon ruled the deal was legal under antitrust law.
AT&T, the No. 2 U.S. wireless carrier by subscribers, agreed in June to manage Time Warner`s Turner networks separately from DirecTV, including setting prices and managing personnel, until February 2019 or the conclusion of the government`s appeal.
The deal was seen as a turning point for a media industry that 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 cable subscription.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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