A deal worth $85.4 billion between AT&T Inc. (NYSE:T) and TIME WARNER Inc/SH NEW (NYSE:TWX) is as good as sealed. The wireless carrier is now free to acquire the media company following clearance by U.S. antitrust regulators. The approval of the deal culminated after a six-week trial, which was featuring suit filed by AT&T against the Justice Department. However, even after the ruling, the Justice Department, which argued that that the deal would harm consumers has the right of appeal.
The antitrust case is the first to be have been adjudicated on the grounds of a vertical merger since the invention of cell phones. However, it has changed the whole outlook of the media and the distribution landscape.
But the deal is critical for the duo’s survival in the industry
Every market or industry is yearning for innovation and creativity to boost its durability. As such things must be one different. Each of the two companies has different strengths. For example; the Warner Bros have a first rating in HBO, Turner, content and creative talent. On the other hand, AT &T stands out in direct-to-consumer distribution and mobile-first entertainment experience. All these strengths put will give the entertainment industry a run for its money. In return, the two will have a market platform for survival.
In support of the new move, the CEO of AT&T, Randall Stephenson, is convinced that they will be offering their customers a differentiated and high-quality experience. He writes, “We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors, and advertisers.”
The AT&T ruling is expected to trigger a wave of mergers
Mergers are not new, especially within the technological industry. However, the same wave is quickly setting foot in the media sector; thanks to the latest ruling by U.S. District Judge Richard Leon. Apparently, the U.S. President Donald Trump denounced the AT &T – Time Warner’s deal when it first came into the limelight in 2016. The President is one of the die-hard critics of Time Warner’s CNN coverage
However, even with all the criticism, the stage is all set and it is likely that many more companies will be coming up for mergers.