WASHINGTON: The U.S. government and AT&T Inc agreed on Thursday on conditions that would allow the wireless company to close its deal for Time Warner Inc while the Justice Department considers an appeal.
In a joint filing, the two sides agreed to certain conditions and asked a federal judge to authorise the companies to close their US$85 billion merger. The government has 60 days to appeal. AT&T said it could close the deal as early as this week.
Among the conditions, AT&T agreed to manage the Turner networks separately from the rest of AT&T Communications and to have no role in setting Turner’s prices.
The deal is seen as a turning point for a media industry that has been upended by companies like Netflix Inc and Alphabet Inc’s Google. The younger firms produce content, sell it online directly to consumers and often offer lucrative targeted advertising.
The AT&T ruling is also expected to trigger a wave of mergers in the media sector, led by Comcast Corp’s US$65 billion bid for the entertainment assets of Twenty-First Century Fox Inc .
The agreement on Thursday removes a potentially major hurdle to AT&T closing its deal ahead of a June 21 deadline. If the Justice Department had sought a stay and been successful it could have meant that the company could not close and would owe Time Warner US$500 million and potentially allow for the deal to be renegotiated.
The filing said that the conditions agreed to by AT&T would remain in effect until Feb. 28, 2019, the conclusion of the case or an appeal by the Department of Justice.
Judge Richard Leon of the U.S. District Court for the District of Columbia ruled on Tuesday that the deal to marry AT&T’s wireless and satellite businesses with Time Warner’s movies and television shows was legal under antitrust law. The Justice Department had argued that it was not.
(Reporting by Diane Bartz and David Shepardson; Editing by Lisa Shumaker)