Cravath Swaine & Moore‘s lawyers have been busy this month. The firm represented TimeWarner in its merger with AT&T that set a new antitrust precedent.
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 had 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. (U.S. v. AT&T, Inc. et al., No. 17-cv-02511 (D.D.C.).
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 team representing Time Warner on the underlying deal was led by partner Faiza J. Saeed and included partners George F. Schoen, Jenny Hochenberg and G.J. Ligelis Jr. and associates Claudia J. Ricciardi, Timothy N. Nguyen, Michael Zhang and Alexander Lee Abelson on M&A matters; partner Jennifer S. Conway and 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 partners Joseph D. Zavaglia and Johnny G. Skumpija 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.