AT&T’s $85 billion purchase of Time Warner beats ban

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  • 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%.

Brian Ducey

Brian graduated from Chaminade High School and the University Of Vermont Kalkin School Of Business with a concentration in Finance. He began his career with Knight Capital Markets, working his way to market maker. Brian later expanded his market repertoire, working with various sell-side research brokerage firms, such as Sidoti & Co., and William O’Neill & Co., as an Account Executive. With over 20 years-experience in the financial industry, Brian has built a unique perspective into “market intelligence” understanding an ability to read the tape and apply second level thinking in a fast paced environment. Brian also carried several market licenses, including the series 7, 24, 55, 65, and 63 licenses as well as previously passing The Connecticut Life and Health Insurance Exam