Get the app
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Money News

AT&T’s Blockbuster Deal with Time Warner

June 13, 2018

The merger between AT&T and media conglomerate Time Warner could reshape the telecommunications and media landscape.

1 min read

AT&T got its big day in court Tuesday.

A federal judge in Washington ruled the giant telecommunications company can proceed with an $85 billion merger with media conglomerate Time Warner.

AT&T has reportedly said the merger is necessary to fend off the growing competitive threat from tech companies such as Google and Netflix.

Why does this matter?

The merger is one of the largest deals in decades, and it’s likely to reshape the media and telecommunications industry, according to experts. The combined company will control assets as diverse as HBO, CNN, and DirecTV.

President Trump’s Department of Justice (DOJ) had voiced opposition to the merger since its announcement in 2016, saying it would restrict competition and increase consumer costs for a range of services from phone and internet to cable and television programming.

Such deals are not unprecedented, however. In 2011, Comcast merged with NBCUniversal. Phone company Verizon also purchased Yahoo, the internet property, in 2017.

More mergers to come

The ruling in favor of AT&T is likely to give a green light to a wide range of mergers that are slated to take place, which must also get approval from the DOJ.

Different types of mergers

These are known as vertical mergers, because the companies operate in distinct, although sometimes overlapping, industries. Such mergers typically have fewer monopoly concerns. In AT&T’s case, it runs a network that could distribute the content made by Time Warner.

By contrast, horizontal mergers, which is when companies in the same or very similar businesses agree to merge, can potentially create a monopoly. (The proposed merger between Disney and 21st Century Fox for $52 billion could be a horizontal merger, as would Sprint’s plan to combine with T-Mobile.)

Some backstory

DOJ’s resistance to the merger set off the court case. Its opposition has been linked to the president’s antipathy toward CNN, which Time Warner owns, according to some analysts. The Trump administration’s opposition to the merger stands in contrast to its pro-business and anti-regulation stance.

Investing, simplified

Start today with as little as $5

Get the App

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

Next for you
What is Net Neutrality and Why Is Everyone Freaking Out About It?

Investment Profile

Bonds Worldwide

An International Bond ETF on Stash

Learn more
Explore more articlesChoose a topic to learn more about
politics love and money social media Retirement Careers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.