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Posted at: Jun 14, 2018, 1:32 AM; last updated: Jun 14, 2018, 1:32 AM (IST)

AT&T wins court nod to buy Time Warner

$85 bn deal a setback for Trump; may set off wave of corporate mergers

Turning point for media industry

  • The deal is 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 pricey cable subscription
  • Cable, satellite and wireless carriers all see buying content companies as a way to add revenue. Trump, a frequent detractor of Time Warner’s CNN and its coverage, denounced the deal when it was announced in October 2016
  • The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast Corp’s bid for some Twenty-First Century Fox Inc assets potentially the first out of the gate
  • The merger would be the fourth largest deal ever attempted in the global telecom, media and entertainment space. It would also be the 12th largest deal in any sector, the data showed
AT&T wins court nod to buy Time Warner

Washington, June 13

A US judge on Tuesday approved the $85 billion merger of wireless and broadband giant AT&T with media-entertainment conglomerate Time Warner, delivering a stinging rebuke to Donald Trump’s administration in its first major antitrust court case.

Federal Judge Richard Leon said the government had failed to meet its burden of proof that the tie-up between the largest US pay-TV operator and the media entertainment giant would harm competition. The case had been closely watched as setting a benchmark for other big corporate mergers, especially in the media and communications sector.

Leon said the case fell short on all counts and warned the government against seeking to hold up the deal with an appeal, saying that would cause “irreparable” harm to the two companies whose tie-up has been delayed for a year and a half. “There would be no irreparable harm to the government (with a delay), only to the companies,” Leon told the packed courtroo.

Leon’s 172-page ruling was a total victory for the companies, saying the government failed to back up its three theories of harm to consumers from the mega-merger. He maintained that the government’s claim that pay TV costs would rise from the tie-up was based on “speculative” logic.

The deal brings together AT&T’s wireless and broadband networks and its DirecTV subscription service with the media assets of Time Warner, which include CNN and other Turner cable channels, Cartoon Network, premium channel HBO and the Warner Bros studios. — AFP

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