Everyone was on their tippy toes this Tuesday waiting for a federal court judge to decide whether or not AT&T (NYSE:T) and Time Warner (NYSE:TWX) could proceed with their merger.
A sigh of relief was given by many companies after U.S. District Court Judge Richard Leon gave AT&T and Time Warner the green light and did not impose conditions on the merger’s approval.
“AT&T and Time Warner expect to see the gains in innovation — particularly by way of a new programmatic advertising platform — that motivated the merger in the first place,” wrote Leon.
“I hope and trust that the Government will have the good judgment, wisdom, and courage to avoid such a manifest injustice. To do otherwise, I fear, would undermine the faith in our system of justice of not only the defendants, but their millions of shareholders and the business community at large,” Leon also wrote.
Leon’s ruling likely has paved the way for other companies to make similar media deals. It wasn’t surprising that a day after Comcast put in a $65 billion cash bid for many of Twenty-First Century Fox’s assets.
Barclays’ head of M&A Americas, Larry Hamdan, remarked on the ruling and said, “If the decision had gone the other way, it would have been a big concern for any company considering M&A in a sector that is evolving. It also is a real positive that the court recognized how rapidly the media sector is changing.”
“All industries are being affected by change, disruption and technology … what the court is trying to say is: ‘we’re not just going to look at, not just the historic picture …in a vacuum.’ Instead, ‘we are going to take into account what’s happening in the real world,'” chimed in Francis J. Aquila, from law firm Sullivan & Cromwell.
After the ruling, AT&T (NYSE:T) vowed to close the deal by June 20th.
“This was a defining case for antitrust enforcement in the US,” former Justice Department antitrust attorney Ketan Jhaveri commented. “It does seem to be a complete and total victory for AT&T.”
AT&T (NYSE:T) General Counsel David McAtee commented, “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 added, We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”
The Justice Department however can appeal the ruling, and the department’s antitrust chief, Makan Delrahim told reporters, “I think the constitution and the statues allow for due process for all litigants and we will take a look at what the next steps are.”
Delrahim has also said, “We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T (NYSE:T) and Time Warner (NYSE:TWX). We will closely review the Court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers.”