AT&T’s Time Warner Takeover at Crossroads With Judge Weighing Ruling

AT&T’s Time Warner Takeover at Crossroads With Judge Weighing Ruling

In the top, the destiny of AT&T Inc.’s $85 billion merger with Time Warner Inc. will come all the way down to he stated versus he stated.

Lawyers for AT&T and the Justice Department clashed one final time at the shut of a six-week trial over the proposed mixture, a deal the federal government goals to cease. The choose overseeing the antitrust case stated Monday he’ll rule in a month and a half whether or not to dam the deal.

“This whole case is a house of cards,” Daniel Petrocelli, the lead legal professional for AT&T and Time Warner, stated in closing arguments Monday earlier than U.S. District Judge Richard Leon in Washington. At about the identical time, outdoors a convention in Los Angeles, Makan Delrahim, who leads the Justice Department’s antitrust division and determined to file the lawsuit final 12 months, sounded equally assured.

“I wouldn’t bring a case I didn’t think we would win,” he stated.

The stakes are excessive for each side. A win for AT&T would seal Chief Executive Officer Randall Stephenson’s imaginative and prescient to feed films, TV and information to his 119 million cellular, web and video prospects. A Justice Department victory would validate Delrahim’s stunning choice to problem the deal. It may additionally make it harder for different corporations to win approval for mergers that don’t mix direct opponents, like CVS Health Corp.’s pending acquisition of well being insurer Aetna Inc.

After all sides offered its statements, Leon acknowledged the necessity to rule by the businesses’ merger deadline of June 21, whereas leaving time for an attraction. He stated he’ll announce his choice at a June 12 listening to. He requested few questions in the course of the closing statements.

CEOs Watch

Monday’s proceedings noticed the return to Washington of each corporations’ CEOs, who joined different executives and legal professionals within the courthouse cafeteria earlier than the listening to to socialize and talk about the case. The group included Time Warner CEO Jeff Bewkes, AT&T’s Stephenson and AT&T government John Stankey, who leads the merger integration crew and can oversee Time Warner if the deal goes by way of. All three males testified at the trial and watched Petrocelli make his last pitch.

The choose will probably be specializing in reams of opposing information and witness testimony, together with reviews from dueling economists employed as specialists by the federal government and the businesses. The lecturers took turns criticizing one another’s information and theories, and have been grilled throughout cross-examinations.

The U.S. argues the deal would give AT&T, which owns DirecTV and is the largest pay-TV firm within the U.S., bargaining leverage over rival cable and satellite tv for pc corporations that need Time Warner programming like CNN, TBS and TNT. That would allow AT&T to extend costs for content material, costing shoppers greater than $400 million a 12 months, in line with the federal government’s estimate.

Panicked Rivals

Justice Department lawyer Craig Conrath described what the federal government considered as an trade panicked over the doable merger, highlighting the testimony of rival pay-TV executives who feared they’d face greater costs for content material or subscriber losses to DirecTV in the event that they didn’t comply with pay. Conrath quoted testimony by RCN Corp. Chief Executive Officer Jim Holanda, who stated the deal is “lose-lose for us, win-win for them.”

While Petrocelli attacked the federal government’s predicted worth enhance as unreliable, Conrath argued the federal government doesn’t should venture worth will increase exactly, simply present that there’s a “reasonable probability” of shopper hurt ensuing from the deal.

AT&T and Time Warner declare the deal is required to compete with corporations like Netflix Inc. and that buyers will truly see decrease costs on account of cost-savings from combining the 2 corporations.

Major Mistakes

In his closing assertion, Petrocelli sought to spotlight what he stated have been main errors within the information utilized by the federal government’s financial professional, Professor Carl Shapiro of the University of California at Berkeley, whose report types the spine of the Justice Department’s lawsuit to dam the merger.

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