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Justice Department challenges AT&T bid to acquire Time Warner

Many California residents use content and services provided by AT&T Inc. or Time Warner Inc. In addition to owning DirecTV, AT&T is the second largest wireless provider in the nation and has 25 million service subscribers. Time Warner owns HBO and CNN. AT&T has sought to buy Time Warner for $85 billion, but the Department of Justice has blocked the transaction after citing concerns that the AT&T would control too much of the wireless and television market. The Justice Department asserts that AT&T would raise prices for millions of consumers.

The lawsuit filed against AT&T by the Justice Department is heading to trial. The government had proposed settlements to avoid the trial, but AT&T rejected solutions that would have required it to sell DirecTV or Time Warner to sell Turner Broadcasting.

Representatives from AT&T insist that they need to buy Time Warner to stay competitive in a media market occupied by large companies. Court filings identify these competitors as Netflix, Google, Amazon and Facebook. Attorneys for AT&T have attempted to block evidence with pretrial motions, but the Justice Department remains firm in its decision to present information from market participants.

When smaller companies merge or acquire other companies or competitors, the scrutiny of the Justice Department does not normally come into play. Even so, these types of business transaction must still follow many regulations. An attorney who has experience with mergers and acquisitions could aid a company with the development of the contracts necessary to complete the deal as well as point out the regulatory compliance that is required.

Source: Reuters, "Judge weighs what evidence U.S. can use to block AT&T, Time Warner merger", Diane Bartz, March 19, 2018

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