AT&T is giving itself some extra space in which to close its $85 billion deal for Time Warner by extending the merger deadline to next year.
In a filing with the SEC, AT&T announced that it was moving the previous merger deadline of Oct. 22, 2017 out to April 22, 2018, giving it another five months to close a merger that has become the target of a U.S. Justice Department lawsuit.
The announcement from AT&T comes roughly one week after the company confirmed the lawsuit during the press conference, in which the company promised it would fight the DOJ’s attempt to block the merger.
“We do not intend to settle this matter out of simple expediency because the rule of law is at issue here. Consistence in the application of the law is critical in a free market economy and it’s equally important for preserving confidence in our government, confidence that they will fairly adjudicate the matters brought before them. When the government suddenly, and without any notice or due process, discards decades of legal precedent, businesses large and small are left with no guideposts. Every business combination or significant investment becomes subject to the whim of a regulator. As we’re seeing here, that tends to be a roll of the dice,” said AT&T CEO Randall Stephenson.
AT&T said the burden of proof now rests in the DOJ’s hands and that AT&T and Time Warner believe the law is on their side. Although AT&T hasn’t mentioned President Donald Trump directly—and Trump denies influencing the DOJ’s decision—speculation still surrounds what role Trump and CNN’s tempestuous relationship may have played in the lawsuit. CNN is owned by Turner Television, a division of Time Warner.
Assistant Attorney General Makan Delrahim, a Trump appointee who now runs the Antitrust Division within the DOJ, has argued that AT&T will use its control over Time Warner's valuable and popular networks and programming—which include TBS, TNT, HBO and CNN, along with shows including "Game of Thrones" and NCAA March Madness—to hinder its rivals by making them pay hundreds of millions more for that programming.
“This merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy,” said Delrahim in a statement. “AT&T/DirecTV’s combination with Time Warner is unlawful, and absent an adequate remedy that would fully prevent the harms this merger would cause, the only appropriate action for the Department of Justice is to seek an injunction from a federal judge blocking the entire transaction.”
Although AT&T has requested an expeditious trial, today’s merger deadline extension proves the company is bracing for a lengthy battle.