Published: Thu, June 14, 2018
Entertaiment | By Mabel Barber

Court Approves AT&T’s Merger With Time Warner

Court Approves AT&T’s Merger With Time Warner

As reported by CNBC, the global telecommunications conglomerate was willing to offer $60B in cash for the Rupert Murdoch-founded company. "These assets would fit like a glove for both Disney and Comcast". Other assets included in the deal are cable networks such as TNT, TBS and Cartoon Network.

In the letter, Roberts also said a Comcast-Fox acquisition is "as or more likely to receive regulatory approval than the Disney transaction" and that Comcast would reimburse Fox for the $1.5 billion breakup fee with Disney. A loss for AT&T and Time Warner could have signaled a new era of government scrutiny over so-called "vertical mergers" and could have halted attempts by companies like Disney, Fox and Comcast to announce their own megadeals.

The proposed acquisition of Time Warner by AT&T was what's known as a "vertical merger", the integration of two companies in different areas of the economy.

The Fox board was scheduled to vote on whether or not to accept the Disney deal on July 10, so we may be in for a flurry of new bids over the next few weeks. And because Comcast has less of a presence outside the USA, the company expects it can get worldwide clearance easily.

In the lawsuit brought forward by the Department of Justice, Judge Richard Leon sided against the government's claims that the $85.4-billion deal between the two companies would violate antitrust laws and unfairly lead to higher prices for consumers. Comcast is making the offer even though Fox has not solicited it.

Comcast made a $65 billion offer for much of the Hollywood holdings of 21st Century Fox.

A merger between Fox and Comcast would create a company with a stable of well-known media brands and franchises, such as the X-Men superheroes.

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner", he said in a statement.

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Comcast said it meant to pursue its $30 billion acquisition of Sky Plc (SKYB.L) in parallel with its Fox bid.

Now, the phone and pay-TV giant will be allowed to absorb the owner of CNN, HBO, the Warner Bros. movie studio, "Game of Thrones", coveted sports programming and other "must-see" shows.

AT&T and Time Warner together are some of the largest buyers of advertising around the globe, spending billions of dollars to market their products. In doing so, Leon also removed the last major hurdle for the deal to go through.

Regulators there also have cleared Comcast's $30.7-billion United States offer for the 61 per cent of Sky that Murdoch doesn't own.

The firm is offering Fox $35 per share in cash, which it says provides more shareholder certainty and is 19% higher than Disney's proposal, which involves exchanging shares.

The Justice Department rarely sues to block a "vertical merger" such as the AT&T and Time Warner because they are not considered as economically unsafe as "horizontal mergers" - or ones in which a companies buys direct competitors such as T-Mobile's pending deal for Sprint.

"21st Century Fox remains subject to the Disney Merger Agreement".

"One can not ignore the fact that there's less independent content to go around", after the AT&T deal, said Henry Su, an antitrust expert with Constantine Cannon LLP.

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