FED BID TO HALT MERGER
Trump move would block sale of his nemesis CNN
THE U.S. Justice Department filed a federal lawsuit Monday to block AT&T’s $85 billion bid to take over Time Warner — arguing that a merger would result in higher bills for consumers and squelch innovations in technology.
“This merger would greatly harm American consumers,” Assistant Attorney General Makan Delrahim of the department’s Antitrust Division said Monday in a statement. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy, he said.
“Absent an adequate remedy that would fully prevent the harms this merger would cause, the only appropriate action for the Department of Justice is to seek an injunction from a federal judge blocking the entire transaction,” Delrahim added.
But the suit, filed in U.S. District Court in Washington, generated quick speculation that President Trump was using the nation’s top law enforcement agency to settle an old score.
Time Warner is the parent company off CNN, which Trump has persistently derided as “fake news.”
Justice Department officials denied the allegation.
“I can understand why merger parties want to try to kick sand in the umpire’s eyes, but we are law enforcement,” a Justice Department official said in a briefing call with reporters. “We have to go to court, and we will prove our case.” But AT&T said the government was exceeding its authority in its attempt to halt the merger, which was unveiled more than a year ago.
“We are surprised to be here, and, candidly, are quite troubled by it,” Randall Stephenson, AT&T’s chairman and chief executive, said at a news conference. “We have no intention of backing down from the government in this lawsuit. We are in it to win.”
Stephenson said AT&T and Time Warner will continue to try to negotiate with the Justice Department and to offer concessions that could allow the deal to close.
But, he said, they would only go so far. “Any agreement that results in us forfeiting control of CNN is a nonstarter,” he said.
AT&T general counsel David McAtee said the lawsuit is a “radical and inexplicable departure from decades of antitrust precedent”
AT&T, the No. 2 U.S. wireless carrier, struck a deal in October 2016 to buy Time Warner, which owns the premium channel HBO, movie studio Warner Bros and CNN. AT&T is banking on the merger to compete by bundling mobile service with video entertainment.
The government’s objections to the deal surprised many on Wall Street. AT&T and Time Warner are not direct competitors, and “vertical” mergers between such companies have typically had an easier time winning government approval than deals that combine two rivals.
Trump, who’s decried burdensome government regulations in office, vowed to block the deal on the campaign trail.