M&A Judgement Day
Tuesday afternoon is shaping up to be one the most important moments for US Business in a generation. At approximately 4:00p ET US District Court Judge Richard Leon is expected to release his ruling in the US Government’s anti-trust lawsuit against the planned merger between AT&T and Time Warner. The ruling will have an immediate impact on both firms named in the suit, and also reverberate across several other companies beyond just the media sector.
For a refresher AT&T, a telco with a large distribution platform, is attempting to vertically merge with Time Warner’s content platform which includes TV networks and a movie studio. The US Govt is saying the merger will give AT&T too much control in the media marketplace, and should either be blocked altogether or allowed to go through on the condition that AT&T divests CNN (one of Time Warner’s networks) from the deal. Industry insiders are chalking the CNN request up to President Trump’s prejudice against the network, since he’s the one who instructed the DOJ to block the merger in the first place.
Judge Leon’s ruling is critically important because it will portend the fate of other planned mergers. Comcast is waiting in the wings with a $60B war chest to wrestle 21st Century Fox from Disney. T-Mobile and Sprint are trying to merge into the nation’s #2 telco – ironically enough ahead of AT&T. Even in an industry as far away as healthcare CVS waits patiently (sorry, I couldn’t resist!) to close on its acquisition of Aetna. The prospects for all of these deals and more will either be accelerated or dampened based on tomorrow’s AT&T/Time Warner decision. Stay tuned . . .