Judge Approves AT&T's $85 Billion Merger with Time Warner

Minnie Mouse

Minnie Mouse

The move follows AT&T Inc.'s (T.N) victory over the Justice Department in its antitrust battle to take over Time Warner Inc (TWX.N). Interestingly enough, Fox stated its board of directors recommends they vote in favor of selling to Disney. "This is even higher than the Street thought, which speaks to Comcast really wanting these key assets". In more recent times, sources claimed Comcast was putting together a $60 billion bid. (There's lots of financial nitty gritty in the Deadline article if you're interested in that sort of thing.) There's also the matter of whether the U.S. Government would allow any of these potential mergers to go through, a process which is far more serious than a mere formality. Comcast said last month that its new offer would be at least as favorable to Fox shareholders as Disney's terms.

"This deal will accelerate content and streaming initiatives between Time Warner properties and AT&T and be a major shot across the bow to other cable and wireless players with all these assets under one hood", he said.

The new AT&T will also reach a huge TV audience, with five Turner cable channels, each with tens of millions of customers.

Things just got slightly more complicated in the ongoing saga of 21st Century Fox.

The Fox stable includes The Simpsons and the X-Men movie franchise. Comcast has said it will add Netflix to some cable bundles. A combined company would hold the rights to air Fox's long running TV show "The Simpsons", the USA rights to the Olympics and Premier League Soccer. Both are also interested in expanding internationally at a time when the USA television business is slowing. That's key for Comcast, which now doesn't have an global presence.

Nabila Ahmed, Deals reporter for Bloomberg News covering media and telecom mergers and acquisitions. The $35 per share offer represents a 19% premium on Disney's $52.4 billion all-stock offer for the same assets.

"There should not be any meaningful difference in the timing of the USA antitrust review between a Comcast and Disney transaction", Roberts said.

The Justice Department filed a lawsuit to stop the deal in November 2017, saying that AT&T's ownership of both DirecTV and Time Warner would give AT&T unfair leverage against rival cable providers that relied on Time Warner's content, such as CNN and HBO's "Game of Thrones".

In turn, that could drive up what consumers pay.

The merger combines the news and entertainment producing Time Warner with a company that delivers it to consumers.

Disney wouldn't face the same issues because it isn't a television distributor as the way Comcast and AT&T are.

Comcast's foray into the streaming space, called Watchable, shut down a year ago after failing to gain traction with viewers.

That could raise regulatory objections.

After all, Disney is big, but Disney is mostly an entertainment conglomerate, whereas Comcast is an industry that provides services to consumers.

Critics pointed out that the deal wouldn't be the end of such massive mergers, and may in fact open the doors to similar acquisitions among other companies. Comcast bid for Sky in April, after Fox's bid for the remainder of European pay-TV group it did not already own was delayed by regulators. AT&T has said it expects to find $1 billion in synergies in the first three years of the deal.

Image: Disney also wants to buy Fox.