The US Department of Justice has moved to take fresh action against the takeover of US media company Time Warner by telco AT&T by appealing a federal judge’s approval of the deal last month.
The DOJ’s latest action emerged through a filing yesterday (Thursday). Judge Richard Leon last month approved the takeover, rejecting an appeal by the DOJ against the $85.4bn (€71.29bn) merger, with analysts predicting the ruling would embolden companies that are seeking major acquisitions of its type.
The administration of US President Donald Trump has opposed the deal and the DOJ in November filed an initial complaint against AT&T, satellite-television provider DirecTV and Time Warner in Federal District Court for the District of Columbia.
At the time, AT&T chief executive Randall Stephenson said that the challenge “defies logic” and is “unprecedented.” AT&T had argued the deal was necessary for it to compete with the rising power of tech companies like Netflix, Apple and Amazon.
For its part, the DOJ had claimed an integrated company would use its size to raise prices and that it would be a cause of concern for a single company to own a major pay-television distributor, AT&T’s DirecTV, as well as Time Warner, which produces content distributed by DirecTV’s rivals.
In his ruling last month, Leon said the DOJ’s objections “rested on improper notions” and warned against an appeal. “I hope the government has the wisdom and courage,” not to seek a stay, he added.
The DOJ offered no further comment beyond yesterday’s filing. However, AT&T, which has already moved to rebrand Time Warner as WarnerMedia, hit out at the decision.
“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned,” AT&T general counsel David McAtee said in a statement. “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. We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”
Time Warner has a significant interest in sports broadcasting in the US, with rights to Major League Baseball, the NBA basketball league and the March Madness college sports basketball competition.
Time Warner also operates pay-television channels HBO and CNN, as well as production studio Warner Bros.