Comcast offers $65 billion to lure Fox from Disney bid
Jun 14 2018
Twenty-First Century Fox jumped 7 percent in extended trade after the ruling on expectations that Comcast and Walt Disney Co could start a bidding war to acquire its media assets.
Analysts say the judge's go-ahead will likely rewrite the rules on how courts apply antitrust laws, paving the way for a number of other potential sales involving names like Comcast, Disney, 21st Century Fox and several other content creation and distribution companies.
"We're disappointed that it took 18 months to get here, but we are relieved that it's finally behind us", he told reporters after the decision.
AT&T countered in court papers that the merger would allow it to compete better with Netflix, Amazon, Google and other companies that offer online video. But looking beyond today, the merger could have a strong effect on future deals.
AT&T and Time Warner's lead lawyer, Daniel Petrocelli, said outside court that the companies were gratified and relieved.
In a scathing opinion, Leon concluded that the government had failed to show competitive harm and urged the USA government not to seek a stay of his ruling pending a potential appeal, saying it would be "manifestly unjust" to do so and not likely to succeed. DOJ antitrust official Makan Delrahim said his agency will consider "next steps" but Judge Richard Leon was explicit in warning the DOJ against requesting a stay or otherwise trying to delay the merger, saying such an action would be "manifestly unjust".
All of those deals would unite companies in different parts of an industry's supply chain.
The decision comes despite criticism from Trump, a frequent detractor of Time Warner's CNN and its coverage.
A number of consumer groups have backed the Trump administration's decision to sue to block the deal, on the assumption that combining the largest pay TV operator with a major media-entertainment player would diminish competition and lead to higher prices.
Now that the ruling went in the merger's favor, sources claim that a Comcast-Fox acquisition will be announced any moment now.
In making that ruling, Leon reaffirmed the judiciary's traditional tolerance for "vertical integration" - the technical term for mergers between companies that operate related, but distinct, businesses. Donald Trump criticized the deal during the 2016 election campaign, and some analysts said the president wanted to block any deal helping Time Warner unit CNN, which he regularly attacks.
Bloomberg via Getty Images AT&T CEO and Chairman Randall Stephenson exits federal court in April.
A United States federal judge was set to announce his verdict in the $85 billion merger of wireless and broadband giant AT&T with media-entertainment conglomerate Time Warner. "The fact is that they've gotten a little easier, and we'll see a big flurry of deals". The merged companies could withhold programming from competitors, pressuring consumers to switch to AT&T services.
The government's case hinged on an economic model produced by Carl Shapiro, an economist at the University of California at Berkeley, who predicted an annual price increase to consumers of at least $285 million. The purchase of Time Warner would give AT&T the premium television content it needed to make its bundle of wireless, television and broadband services more attractive to customers.