Floodgates Are Open for Big Mergers After ‘Landmark’ AT&T-Time Warner Decision, Experts Say

Trump administration is “not standing on solid ground” if it fights future mergers, Villanova business professor tells TheWrap

Last Updated: June 12, 2018 @ 6:23 PM

Now that a judge has granted AT&T the green light to acquire Time Warner for $85.4 billion, a media industry-wide scramble for assets is highly likely, Villanova business professor Mary Kelly told TheWrap on Tuesday.

“This opens the floodgates,” said Kelly. “I don’t think some of these other companies can just sit on their hands. They don’t have the luxury of time.”

Earlier on Tuesday, U.S. District Judge Richard Leon ruled in favor of AT&T and Time Warner, shutting down the U.S. Department of Justice’s argument that the proposed merger will hurt competition and consumers.

The decision is the first real test of antitrust regulation under President Trump, and CFRA analyst Tuna Amobi, like Kelly, also expects that because of the “regulatory clarity” stemming from the case, companies across multiple industries will now catch the merger and acquisition bug.

The most immediate impact is expected to be on Disney’s plan to acquire billions in 20th Century Fox assets. AT&T’s “resounding victory” in the “landmark” case is likely to complicate matters considerably.

“Comcast,” Amobi said, is likely “to be emboldened to make a better offer [than Disney] for Fox.”

Judge Leon’s decision dealt a blow to President Trump, who has been a vocal opponent of the AT&T acquisition of Time Warner since his 2016 presidential campaign. However, in Leon’s written opinion, he said it is unlikely that the government will prevail if it appeals his decision.

Kelly agrees with that reasoning, and cautions the president not to try stopping future such deals with the same fervor.

“He has to be careful not to double down and try to fight some of these coming mergers. I don’t see them being challenged,” Kelly said. “If he fights them, he’s not standing on solid ground.”

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