AT&T announced it had completed its $85.4 billion acquisition of Time Warner on Thursday, shortly after the Justice Department said it would not seek an injunction to stop the deal.þþThe merger gives AT&T a vast media and entertainment portfolio belonging to Time Warner, including HBO and CNN, rights to major sports leagues and valuable film franchises such as “Harry Potter.”þþ“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” Randall L. Stephenson, AT&T’s chairman and chief executive, said in a statement.þþThe Justice Department had six days to seek an injunction after a federal judge approved AT&T’s purchase of Time Warner on Tuesday. The judge’s decision is expected to prompt a series of other mergers, especially in the media industry.þþHowever, the Justice Department still has 60 days from the date of the ruling to file an appeal, even if the companies close the merger, and such a filing remained a possibility.þþ“We are still considering whether or not to appeal,” a spokesman for the department said Thursday.þþThere was a time limit on when the government could seek an injunction, because the merger agreement between the companies expires on June 21. If an injunction had been granted, the companies would have had to extend the date or AT&T would have had to pay Time Warner $500 million in what is known as a reverse termination fee.þþAT&T can now take advantage of Time Warner’s business to develop new lines of revenue. The phone giant plans to marry its subscriber data with Time Warner’s TV networks to sell targeted advertising, which sells at higher rates. The company is also looking to tap its creative engine to generate new forms of video for mobile devices.þþJeff Bewkes, the chief executive of Time Warner, has agreed to stay on as a “senior advisor during a transition period,” according to the statement.þþThe leaders of Time Warner’s units — Richard Plepler at HBO, Kevin Tsujihara at Warner Bros. and John Martin at Turner — will now report to John Stankey, a 30-year veteran of AT&T and chief executive of its media division.þþThe Justice Department had challenged the deal, saying the telecom company’s acquisition of Time Warner would lead to fewer choices for consumers and higher prices for television and internet services. But the judge, Richard J. Leon of United States District Court in Washington, ruled emphatically in favor of the companies.þþHe also took the unusual step of strongly warning the government against trying to stop the merger with an emergency stay.þþThe defeat of the government’s antitrust challenge raises questions about the future of merger reviews and whether the agency will be able to aggressively resist corporate consolidation going forward.þþMakan Delrahim, the head of the antitrust division at the Justice Department, had been adamant that the merger should be opposed because he said that cable subscribers would see higher prices and the development of streaming video would be hampered by the merger.þþThe agency could have a difficult time winning an appeal, many experts said. The judge’s ruling was narrow and avoided sweeping statements about antitrust laws or other cases, the experts said.þþ“The ultimate question is whether Judge Leon made legal conclusions that are unconventional or controversial,” said Paul Glenchur, a senior telecommunications analyst for Hedgeye Potomac Research. “We think he largely avoided the possible pitfalls.”
Source: NY Times
