After a couple of weeks of heavy discussion around the regulatory prospects for AT&T’s (NYSE:T) long-in-the-making $85B plan to take over Time Warner (NYSE:TWX), the Justice Dept. says it’s filing suit to stop the deal.
The DOJ formally announced its opposition minutes ago. T closed up 0.4% and is up 0.5% after hours; TWX closed down 1.1% in regular action and is down another 0.3% postmarket.
“This merger would greatly harm American consumers,” says DOJ antitrust chief Makan Delrahim. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”
Rivals would be forced to pay hundreds of millions of dollars more per year for Time Warner networks, the department says.
It also argued that the lawsuit wasn’t influenced by President Trump, or by anyone else in the White House.
Delrahim is known to favor structural remedies (like asset sales) over behavioral remedies like those applied in the (similar) Comcast-NBCUniversal deal, which he has suggested don’t work.
The deal was first reached more than a year ago — in October 2016 — and its fate was subject to heavy speculation after President Trump (who had vocally opposed the deal in the weeks leading to the U.S. presidential election) won the presidency.
AT&T got its response out ahead of the DOJ’s statements, calling the suit “radical” and “inexplicable.”
The key to the deal may not rest on sorting out an eventual winner/loser in the suit — if the matter takes enough months to resolve, AT&T and Time Warner may elect to walk away from the deal.
Either way, its game on, Department of Justice versus AT&T.