AT & T, the Department of Justice awaits decision that could determine the future of the media

WASHINGTON (Reuters) – DirecTV owner AT & T expects a court ruling that will determine whether it can buy Time Warner Inc, a decision that could trigger a cascade of pay-TV companies buying TVs and filmmakers and the first great test of the antitrust teams of the Trump administration.

Judge Richard Leon of the US District Court is expected. UU For the District of Columbia, fail at 4 p.m. ET (2000 GMT) on whether the $ 85 billion deal can advance more than a year and a half after it was announced.

The government argued in a six-week trial this spring that DirecTV's AT & T property, which has 20 million subscribers, would be too powerful if combined with Time Warner, which owns Turner sports and the news of CNN. That power would allow the company to increase prices for pay television rivals and online streaming services, the government said.

AT & T said the deal was legal, and preemptively offered to take any dispute with its pay TV rivals to arbitration while refraining from retaining the content, or "getting dark," during the arbitration.

If AT & T wins, the Justice Department can reconsider whether it should sue to stop other transactions in which a company buys a supplier, known as "vertical merger."

"Depending on the scope of the resolution, if it is limited, such as" I do not think Time Warner content is essential, "that may have implications for a similar merger in the telecommunications space, but may not have an effect drastic in other vertical mergers, "said Caroline Holland, who was in the Antitrust Division during the administration of former President Barack Obama.

A major victory for the Department of Justice would send chills to mergers and acquisitions banks pursuing deals in which a company seeks to merge with a supplier.

An agreement already depends on the decision: Comcast Corp said in May that it was preparing a larger cash offer for most of Twenty-First Century Fox's media badets, but sources say it will only proceed if AT & T wins your case.

Two other vertical offers under review are Cigna Corp's plan to buy Express Scripts Holding Co for $ 52 billion and the planned merger of CVS Health Corp with Aetna Inc for $ 69 billion.

Prior to the court decision, a senior antitrust official from the Department of Justice urged investors not to read too much about the decision to sue to prevent AT & T from buying Time Warner.

Most of the proposed transactions were good for consumers or neutrals, said Makan Delrahim, deputy attorney general of antitrust.

"I understand that some journalists and observers have recently expressed their concern that the antitrust division no longer believes that vertical mergers can be efficient and beneficial for competition and consumers," he said. "Rest badured that these concerns are out of place"

FILE PHOTO: a combination photo shows the price of Time Warner shares on the New York Stock Exchange and the AT & T logo in New York, NY, USA UU., On November 15, 2017 and October 23, 2016 respectively. REUTERS / Lucas Jackson (L) and REUTERS / Stephanie Keith / Photo Archive

Information from Diane Bartz; Editing by Lisa Shumaker


Source link