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AT&T's Acquisition Of Time Warner Upheld By US Appeals Court

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AT&T's Acquisition Of Time Warner Upheld By US Appeals Court

The U.S. Justice Department's prior bid to overturn AT&T Inc. (NYSE: T)'s acquisition of Time Warner was rejected by an appeals court Tuesday.

What Happened

The Justice Department claimed in 2017 the combination of AT&T and Time Warner under one ownership structure would have "both the incentive and the ability to raise its rivals' costs and stifle growth of innovative, next-generation entrants," CNN reported. A three-judge panel from the U.S. Court of Appeals for the DC Circuit rejected the claims, which now gives the company the green light to proceed with no conditions.

Why It's Important

The three judges argue the U.S. government didn't factor in an arbitration agreement that Turner offered carriers in the event of pricing or contract disputes, CNN noted. The judges also highlighted rising competition from online streaming platforms.

"In this evidentiary context, the government's objections that the district court misunderstood and misapplied economic principles and clearly erred in rejecting the quantitative model are unpersuasive. Accordingly, we affirm," the judges wrote.

What's Next

The Justice Department could move the case towards a full appeals court or even appeal the decision to the Supreme Court, CNN said.

AT&T General Counsel David McAtee said in a statement obtained by CNBC the merger has already shown consumer benefits "and it will continue to do so for years to come." The statement also said the company hopes the decision will "end this litigation."

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Citi: Buy The Dip In AT&T

Photo by Luismt94/Wikimedia.

Posted-In: cnn Court Of Appeals Time WarnerNews Legal M&A Media Best of Benzinga

 

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