The trial over the Justice Department’s (DOJ) lawsuit to block AT&T’s purchase of Time Warner ended Monday, April 30. The Wall Street Journal reported the the DOJ urged the judge in the AT&T merger case to consider “alternative” remedies if he decides not to block the planned acquisition of Time Warner outright.
In the last few minutes of his 75-minute long closing statement, the government’s lead attorney, Craig Conrath, said the DOJ prefers structural remedies to the deal, including “partial divestures.” Should the merger be approved, he argued, AT&T should be forced to sell a portion of Time Warner such as the Turner Networks, which include CNN, TNT and TBS. The Turner Networks’ value to rival distributors is a major sticking point in the DOJ’s lawsuit, which alleges that AT&T would be able to threaten to withhold Turner content during negotiations with distributors in order to raise prices and lure customers away from rivals.
AT&T and Time Warner lead attorney Dan Petrocelli slammed the government’s case, saying it’s “thin, tenuous” and a “house of cards.”
“This is a case of theories in search of facts,” he said, telling Leon that the trial “has exposed serious questions about the credibility of the government’s entire presentation.”
Judge Richard Leon, who presided over the seven-week bench trial, said that he plans to issue his ruling on June 12 but left open the possibility that a ruling could come sooner. A June 12 ruling will fall just nine days before the June 21 merger deadline between the two companies, at which point either side could walk away from the deal.
The judge’s decision will guide dealmakers on how aggressive they can be with “‘vertical mergers’,” where one company buys another in the same industry but operating at a different point in the supply chain.
Full Content: Wall Street Journal
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