DOJ's Time Warner Appeal Worries AT&T Investors: Report

AT&T's investors are worried about the Justice Department's decision to appeal the historic acquisition of Time Warner valued at $85.6 billion, having signaled as much during Thursday trading which saw the company's shares drop by some 1.8 percentage points. The tie-up itself has already been completed following the wireless carrier's first-instance win against the DOJ last month, with AT&T already rebranding Time Warner into WarnerMedia as part of its next large-scale diversification move. "While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances," AT&T General Counsel David McAtee told CNN, adding that the firm is fully prepared to once again defend its position in the court of law.

Industry analysts remain skeptical that the DOJ's appeal will amount to much, especially since the federal regulator has yet to even publicly disclose on what grounds is it opposing the decision of Judge Richard Leon who approved the consolidation in June after concluding it raises no antitrust concerns, allowing AT&T and Time Warner to merge without any further concessions. The DOJ previously attempted pressuring the second-largest mobile service provider in the United States into divesting its DIRECTV unit or pledging to sell off Time Warner's Turner, claiming a fully combined entity would yield to much power in the media industry, especially given how AT&T also acts as its distributor. The latter point has been highlighted by the government as crucial, with its antitrust watchdog arguing AT&T would be able to easily ramp up content licensing fees and hence place its own distribution services such as DIRECTV at an unfair advantage over rivaling solutions.

The DOJ's notice of appeal has been filed with Washington-based U.S. District Court on Thursday, with Washington now being expected to elaborate on the complaint in the coming weeks. The ownership of Time Warner provides AT&T with a more diversified portfolio that it believes will be needed as the wireless market continues suffering from saturation that only 5G services may be able to partially address. Turner's flagship unit HBO is already under pressure from its new parent to start producing more content and attract new subscribers as AT&T reportedly doesn't believe the division is making enough money.

You May Like These
More Like This:
Android Headlines We Are Hiring Apply Now