AT&T and Time Warner have once again extended the deadline for their proposed $85 billion merger, which is headed to court after the U.S. Justice Department filed a lawsuit to block the deal.
In an SEC filing, AT&T disclosed that the merger deadline has been shifted to June 21, 2018, after both AT&T and Time Warner waived their rights to terminate the deal by the previous deadline set for April 22, 2018.
The additional extension to the merger deadline comes after last month AT&T and Time Warner agreed to move the date from Oct. 22, 2017 to April 22, 2018, in order to give the companies more time to fend off the DOJ’s lawsuit.
“AT&T intends to vigorously contest the DOJ's allegations and is confident that the Court will reject the DOJ's challenge to the merger,” AT&T said in a November filing.
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Judge Richard Leon has set a March 19, 2018 court date for the DOJ’s challenge to the AT&T-Time Warner merger, and he said he expects the trial to last about three weeks with a decision coming by late April or May.
Last week, AT&T revealed that its attempts to reach terms addressing antitrust issues with the merger have been unsuccessful. The company said discussions with the DOJ over potential remedies fell apart and that “despite their efforts, [they] have not been able to settle the matter.”
Although AT&T CEO Randall Stephenson said that his company would continue to propose potential conditions for the approval of the deal, he has remained adamant that AT&T is fully prepared to challenge the lawsuit.
“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 Stephenson.
The DOJ is arguing 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. The department also argues that AT&T would use its market control to slow innovation in video delivery, which would limit choices for American households and in turn cause service costs to rise.
“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 Assistant Attorney General Makan 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.”