AT&T Extends Deadline of Time Warner Acquisition to April

As indicated in a filing with the Securities and Exchange Commission (SEC), AT&T has apparently extended the deadline for the closing of its acquisition of Time Warner to April 22nd of next year. This marks the second time that the second biggest mobile operator in the United States has decided to extend the deadline, which was previously at October 22nd of this year.

A little more than a week ago, news had broken that the United States Department of Justice was making a move to block AT&T’s buy out of Time Warner. The Department of Justice had filed a lawsuit to stop the acquisition. The major US wireless carrier has since declared its intentions to fight the Department of Justice’s move. 

As explained by Makan Delrahim, the new head of the Department of Justice’s antitrust section, a merger between telecoms giants AT&T and digital media powerhouse Time Warner would result in a combined business empire that would wield too much power. Interestingly, various industry watchers have expected the acquisition deal to happen without any major obstacles, but how quickly things change. The Department of Justice’s lawsuit also marks the first major antitrust enforcement made under President Donald Trump’s administration. 

The acquisition deal would have helped immensely in transforming AT&T into more than just a wireless carrier. Time Warner happens to own some of the most lucrative media holdings today, including well known brands such as HBO, CNN, and TBS. If AT&T closes the deal, it would find itself in a good position to bundle entertainment offerings such as Game of Thrones, Justice League, and Westworld with its wireless, Internet, and TV services.

Just to be clear about everything, extending the deadline will not make AT&T’s problems with the Department of Justice go away. But it does buy the wireless carrier some time, especially in mapping out its strategy in closing the acquisition deal. The company will likely argue that a merger between AT&T and Time Warner would be greatly beneficial to consumers, especially in terms of providing a broader range of wireless and digital media entertainment options for customers. And because the merger would be between two companies offering different services (vertical merger), healthy competition would not be compromised in any way.

AT&T is second only to industry leader Verizon Wireless in terms of the size of its customer base. While it is true that AT&T has managed to purchase DirecTV, it might need to acquire more assets in order to match the Big Red’s recent moves, which include the acquisition of AOL back in 2015, and more recently, Yahoo.