AT&T Closes Time Warner Deal After U.S. Declines to Seek Stay

(Bloomberg) -- AT&T Inc. closed its $85 billion takeover of Time Warner Inc., the culmination of a 20-month battle for the right to enter the media business by acquiring the owner of HBO and Warner Bros.

The completion of the deal came just hours after AT&T made a filing in federal court in Washington disclosing that it had reached an agreement with the Justice Department that waived a waiting period for closing.

The agreement doesn't prevent the department's antitrust division from appealing the decision issued Tuesday by a federal judge rejecting the U.S. antitrust lawsuit against the deal. The government is still weighing whether to appeal the ruling, a Justice Department official said.

AT&T's completion of the takeover caps a nearly two-year effort to acquire Time Warner, the owner of CNN, HBO and Warner Brothers studio. The Justice Department sued in November to stop the merger, claiming the combination would raise prices for pay-TV subscribers across the country. After a six-week trial, U.S. District Judge Richard Leon ruled against the government's case.

AT&T Chief Executive Officer Randall Stephenson's vision for the Time Warner deal is to turn his company into an entertainment giant that can feed Time Warner programming to its 119 million mobile, internet and video customers, and go head-to-head with Netflix Inc. and Amazon.com Inc.

‘Fresh Approach'

“We're going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” Stephenson said in a statement.

AT&T has agreed to manage Turner networks as a separate business unit until February 2019, according to a letter filed by AT&T's lawyer. That separation means that if the Justice Department appeals and wins, Turner can be more easily divested.

Jeff Bewkes, the former chairman and CEO of Time Warner, will remain with the company as a senior adviser during a transition period.

To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Nick Turner

©2018 Bloomberg L.P.