Posts tagged with "Time Warner"

AT&T-Time Warner deal to close next week

June 14, 2018

If only Alexander Graham Bell could see them now: On June 12, federal Judge Richard Leon handed down a huge victory to AT&T (which began business in 1877 as Bell Telephone)—granting the telecom giant a go-ahead for its  $85 billion acquisition of mass media and entertainment conglomerate Time Warner, a decision that promises to reshape the media industry.

After a six-week trial, Judge Leon—who serves as a senior U.S. district judge for the District of Columbia— ruled that the government had failed to prove its case that the deal violates antitrust law. According to a report by CNN Money, “using unusually strong language,” Leon discouraged the Justice Department from asking him to put the ruling on hold while it considers an appeal. He said such a stay would be “manifestly unjust” because it would have the effect of killing the acquisition.

In a formal statement released by AT&T, General Counsel David McAtee, commented: “We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner. We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government. We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.

Following that closing, HBO, CNN, Warner Bros. and Time Warner’s other brands will change hands next week—becoming the second largest media company (valued at 282 billion) in the United States, after Amazon (which is valued at $817 billion).

During his campaign, CNN noted, President Trump had objected to the merger on the grounds that, “As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN—a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.”

A new poll of 1,502 registered Republican voters shows that a majority of President Trump’s supporters oppose the pending AT&T-Time Warner merger. The survey from trade group Incompas and IMGE, a GOP polling firm, shows that 60% of the president’s base said they agree with his campaign pledge to block the AT&T-Time Warner merger. That figure drops to 57% among all Republicans and to 42% among voters overall.

Research contact: @TeamIMGE

Global bankers fear Trump will negatively impact M&A

December 7, 2017

With the stock market soaring and his tax “reform” bill about to be passed by Republicans in the U.S. Congress, President Donald Trump has said he will be “unbeatable” in 2020. When it comes to mergers and acquisitions, however, global dealmakers are less sanguine, according to results of a poll released on December 4.

They fear that the man who co-wrote “The Art of the Deal”  with Tony Schwartz may be unable to resist meddling in the M&A sphere.

In fact, based on the findings of the poll, conducted by law firm Herbert Smith Freehills in partnership with The Economist Group, Trump will have a detrimental impact on M&A over the next couple of years.

The two organizations got feedback this quarter from more than 200 senior executives and advisers involved in deal-making in Hong Kong, London, New York and Paris, Bloomberg reported.

The survey was taken before Senate Republicans narrowly passed their 500-page rewrite of the tax code and a repeal of the Obamacare individual mandate.

While 42% of global respondents said Trump’s impact will be negative; about 38% said the president actually has no impact and only 20% predicted a positive effect.

Despite the upbeat expectations of the latter respondents, already this year, deals in North America have declined almost one-third from the same period in 2016—to $1.1 trillion, bringing global volume down 11%, according to data compiled by Bloomberg.

Indeed, the Trump’s administration has demonstrated what can only be characterized as a zeal to push back on deals that it deduces will give companies too much power. For example, Bloomberg points out, AT&T’s $85.4 billion bid for entertainment giant Time Warner is facing an unexpected legal battle with the Justice Department.

Such political involvement in deals could cause problems, respondents to the poll said. Some 36% opined that it’s an “impediment and not welcome,” while 52% said intervention is an impediment but “necessary for wider social, economic and/or policy reasons,” according to the Herbert Smith survey. Only 12% said it’s not a significant impediment.

Research contact: The Economist Group  (202- 650-6500)