The Justice Department Will Appeal AT&T-Time Warner Deal

Gladys Abbott
July 15, 2018

AT&T's $81bn takeover of Time Warner, the owner of CNN and HBO among other high-profile assets, has become a political lightning rod after Donald Trump criticized the deal and said it "was not good for the country". The potential ramifications here are huge and involve several entities, not to mention the precedent it could set.

The Department of Justice on Thursday filed the paperwork to appeal a federal judge's approval of AT&T's $85 billion acquisition of Time Warner.

AT&T general counsel David McAtee said the company is "surprised" the Justice Department is appealing.

The government indicated through the court filing that it still wants to stop the merger - even if that means decoupling the two companies.

Among 19 analysts covering AT&T Inc (NYSE:T), 6 have Buy rating, 2 Sell and 11 Hold.

CNN has always been a target for Trump, calling the Time Warner-owned news network "fake news".

The Justice Department sued to stop the deal a year ago, saying that a distributor, AT&T, owning the likes of HBO, CNN and Warner Bros. would harm consumers by causing an increase in prices and would hurt innovation and competition.

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The Department of Justice challenged the merger on the grounds that it would restrict pay-TV competition.

A notice of appeal was filed yesterday with a federal appeals court one month after Judge Richard Leon rejected the government's efforts to block the United States dollars 85 billion deal following a weeks-long antitrust trial.

President Trump has also said he opposes the merger; he claims it would concentrate too much power into the hands of one company. Prosecutors argued that AT&T could inflate the price of HBO for other content distributors.

AT&T has committed to certain conditions under which it will run Time Warner's Turner Broadcasting, which includes CNN.

A judge approved the deal last month after almost two years of effort by the two companies.

Just a day after Leon ruled, Comcast launched a $65 billion cash bid for the bulk of 21st Century Fox - topping Disney's all-stock $52.5 billion offer in December.

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