- Court decision backs last summer’s merger
- Justice Department unlikely to take matter further
- AT&T trades slightly higher
The purchase of Time Warner by AT&T for $85 billion does not violate federal antitrust rules, according to a U.S. appeals court ruling.
On Tuesday, the court declined to force last summer’s deal to be undone, with the appellate judges writing: “The judgment of the district court appealed from this cause is hereby affirmed.”
Last summer, a U.S. District Court judge had ruled that AT&T could buy Time Warner, dismissing claims from the government that AT&T would have too much power over TV content as a result of the deal.
AT&T had argued that the merger represented a “vertical” integration because Time Warner were never a competitor. The company, along with critics of President Donald Trump, suggested that the Justice Department was attempting to use antitrust concerns to stop the merger as an attempt to damage CNN.
In a September court filing, AT&T argued: “The Department of Justice’s suit to block the transaction was the United States’ first litigated challenge to a vertical merger in four decades, prompting many press outlets to question whether the White House had improperly influenced DOJ’s decision to bring the case.”
In recent days, published reports have suggested that the Justice Department did not intend to appeal the case to the U.S. Supreme Court in the face of a loss at the appellate level. The latest judgment now makes it likely that AT&T’s $85 billion purchase of Time Warner is safe.
In the wake of Tuesday’s court victory, shares in AT&T went as high as $31.43, representing an increase of 1% on the day. By the end of the session, they had dropped back to stand ahead by around 0.3%.