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Time Warner Stock Jumps, AT&T Falls After Ruling Clears Path to Merger

13 June, 2018, 06:11 | Author: Sara Gill
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Opponents of the deal, meanwhile, are pointing to both Leon's decision and yesterday's removal of net neutrality protections as a clear signal that things are going to be getting worse (and more expensive) for consumers. Last November, the U.S. Justice Department sued to block the merger, arguing that it would hurt American consumers with higher monthly bills and less innovation. According to a scheduling order, AT&T has agreed not to complete the acquisition for six days to allow time for an appeal.

In this October 24, 2016, file photo, clouds are reflected in the glass facade of the Time Warner building in NY.

The $85 billion merger between AT&T and Time Warner was approved Tuesday.

AT&T CEO Randall Stephenson remained at company headquarters in Dallas, and he learned of the ruling when AT&T general counsel David McAtee called him, a spokesperson said.

A USA federal judge on Tuesday cleared the mega merger between AT&T and Time Warner in an antitrust case with potential far-reaching implications.

Ahead of the ruling, public-interest advocates had expressed deep fears that AT&T's victory would only quicken the rapid consolidation of the media, telecom and tech industries.

Comcast is aiming to gain control over Fox assets such as its Twentieth Century Fox Film and TV studios, which includes brands ranging from X-Men to The Simpsons, as well many of its cable networks. Comcast, which had earlier bid for the Fox assets but lost out to Disney, is expected to renew its pursuit now that AT&T has won.

AT&T, meanwhile, saw its share price fall 2.1 percent, to $33.63, after the ruling was revealed. "The question is whether Disney is ready because unlike in 2004, Comcast is in it to win!"

A Comcast had no comment on Tuesday night.

Nonetheless, Niknam thinks AT&T's transition to more streaming services could weigh on profitability this year. "The case stands as a testament to the wisdom of this combination of these two great companies and how it will benefit consumers for generations to come".

On the other side, AT&T and Time Warner (big as they may be) face steep competition from the FAANG companies (Facebook, Apple, Amazon, Netflix and Google), all of whom have made video a top priority. As reported by CNBC, the global telecommunications conglomerate was willing to offer $60B in cash for the Rupert Murdoch-founded company.

The nuances of this case are important, as the implications of this decision reach far beyond the individual businesses of AT&T and Time Warner to the vast media landscape as a whole. Therefore, AT&T would likely increase the rates that other content distributors must pay to air Time Warner content - forcing its rivals to either raise prices on their subscribers (which would inspire some consumers to switch to DirectTV), or else accept lower profit margins (which would impair their ability to compete with AT&T in the long term).

AT&T claims that with a purchase of Time Warner, they'll be able to compete in the grand scheme of internet and TV into the future.

Experts have said that the DOJ attorneys may have been somewhat hamstrung by the fact that AT&T's acquisition of Time Warner is somewhat unusual.



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