Image used under license from Shutterstock.com
The Justice department is suing to block the proposed merger between AT&T and Time Warner. The challenge of a so-called vertical merger is rare because the two parties operate in different parts of an industry. The WSJ has more:
On Monday, the Justice Department filed a lawsuit challenging AT&T’s $85 billion cash-and-stock deal for Time Warner Inc. after a nearly 13-month review. It was around this time in 2011 that AT&T was forced to withdraw its application with the Federal Communications Commission for a $39 billion takeover of wireless rival T-Mobile US Inc., amid opposition from antitrust and telecom regulators.
Mr. Stephenson has vowed to fight the Justice Department in court to proceed with a takeover of Time Warner. The deal aims to combine the TV and film producer with his company’s existing base of satellite and internet subscribers.
“The government contends that AT&T with 25 million TV customers and Turner with a single-digit share of all media watched will have unlawful market power, this defies logic and it is unprecedented,” Mr. Stephenson said in a news conference on Monday.
In a statement Monday, AT&T general counsel David McAtee said the company would challenge the lawsuit, calling it “a radical and inexplicable departure from decades of antitrust precedent.”
Justice maintains that it is open to a settlement with AT&T on the condition that the telecom giant sell DirectTV or some of Time Warner’s cable networks. AT&T says it prefers court and expects to win. We would expect AT&T to be the favorite if the case makes it to court.
Jeremy Jones, CFA
Latest posts by Jeremy Jones, CFA (see all)
- American Stocks Can’t Outrun the World Forever - April 25, 2019
- Just Four Stocks Have Generated Half of the NASDAQ 100’s Gains in April - April 24, 2019
- Will Every Recession Now Demand Extraordinary Fed Intervention? - April 23, 2019