AT&T’s Buyout of Time Warner Upheld by Appeals Court

Justice Department had appealed AT&T’s buyout soon after it was approved last July

Last Updated: February 26, 2019 @ 8:29 AM

An appeals court blocked the Justice Department’s appeal to overturn AT&T’s buyout of Time Warner on Tuesday, marking the latest twist in the long-running feud between the media giant and U.S. antitrust regulators.

The decision, reported by CNBC, was reached by a three-judge panel from the U.S. Court of Appeals. The Justice Department can now decide whether it wants to ask the full appeals court to hear its case against the deal or appeal the ruling to the Supreme Court, according to CNN.

“The merger of these innovative companies has already yielded significant consumer benefits, and it will continue to do so for years to come,” David McAtee, AT&T’s general counsel, said in a statement. “While we respect the important role that the U.S. Department of Justice plays in the merger review process, we trust that today’s unanimous decision from the D.C. Circuit will end this litigation.”

AT&T shares increased about 0.4 percent in early trading on Tuesday, hitting $31.26 per share.

AT&T closed its merger with Time Warner in June, only days after receiving approval from U.S. District Court Judge Richard Leon on the $85.4 billion deal. At the time, Leon said he didn’t believe an appeal would be successful.

The following month, however, the Justice Department appealed the ruling, arguing the deal could hurt competition and lead to higher prices for customers because AT&T-owned DirecTV could charge its rivals more for Time Warner content.

The AT&T-Time Warner merger has been held up in regulatory limbo since the deal was first announced in October 2016. The agreement was skewered by President Trump as he wrapped up his campaign in 2016.

“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said soon after the merger was initially announced.

President Trump’s criticism of the merger called into question whether AT&T would have to accept an amended deal, without Time Warner assets like CNN, to receive approval. But the deal was approved with no conditions by Judge Leon, allowing AT&T to bring CNN and Warner Bros. into the fold.