Time Warner Wins Historic Antitrust Suit by DOJ Securing Clearance for its $109 Billion Merger with AT&T

On June 12, 2018, the United States District Court for the District of Columbia ruled that AT&T Inc. and Time Warner Inc. can proceed with their $108.7 billion merger, defeating the United States Department of Justice’s attempt to block the union—the government’s first challenge to a vertical merger in decades. In addition to representing Time Warner on the deal, which has been pending since 2016, Cravath led Time Warner’s defense in the government’s antitrust investigation and litigation, which culminated in a six-week trial during March and April 2018.

In a 170-page opinion, Judge Richard J. Leon held that the DOJ failed to provide sufficient proof that AT&T’s planned acquisition of Time Warner would substantially lessen competition in violation of Section 7 of the Clayton Act and raise prices for consumers. The acquisition, when completed, will combine Time Warner’s library of content, which includes offerings from HBO, Warner Bros. and Turner, with AT&T’s customer relationships, pay TV subscriber base and scale in TV, mobile and broadband distribution. Noting that “[t]he parties have waged an epic battle, under extremely restricted deadlines, to litigate and try this historic vertical merger case,” Judge Leon concluded his opinion by warning the DOJ against bringing an appeal for the purpose of trying to delay the deal, indicating that such a tactic would cause “manifest injustice.”

The Cravath antitrust and trial team included partners Christine A. Varney, Peter T. Barbur, Julie A. North, Kevin J. Orsini and Margaret Segall D’Amico, who were assisted by associates Kate F. Stamell, Jacqueline D. Harrington, Allison C. Davido, Kelsie A. Docherty, Gregg A. Fish, Peter H. Fountain, Xiaoxi Tu, Lelia A. Ledain, Jenny Lee, Karice D. Rhule, Salah M. Hawkins and A. Maya Khan and senior attorneys Gerald A. Ford and Lillian S. Grossbard. Amanda S. Coleman also worked on this matter. The case is U.S. v. AT&T, Inc. et al., No. 17-cv-02511 (D.D.C.).

The Cravath team representing Time Warner on the underlying deal was led by partner Faiza J. Saeed and included partners George F. Schoen and G.J. Ligelis Jr. and associates Claudia J. Ricciardi, Timothy N. Nguyen, Michael Zhang and Alexander Lee Abelson on M&A matters; associates Matthew J. Bobby and Sarah W. Colangelo on executive compensation and benefits matters; partners Stephen L. Gordon and Lauren Angelilli and associates Richard Bohm and Cecily Xi on tax matters; partner Michael S. Goldman, senior attorney Sarah F. Rosen, and associates Jared B. Taylor, Adam M. Sanchez and Marc Bode on financing matters; and partner Joseph D. Zavaglia and associates Jennifer Uren, Joshua Ayal, Erim E. Tuc, Austin L. Lee and Michael A. Naclerio on securities matters. Summer associate Caroline B. Shinkle also worked on M&A matters.