To Evolution

One of the biggest mergers and acquisitions decisions will happen today. This is how AT & T-Time Warner will change the world of media

    Abdulaziz Sobh
    By Abdulaziz Sobh

    Categories: Business

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    AT & T and Time Warner will find their collective fate on Tuesday when US District Court Judge Richard Leon determines whether the companies can merge. While the government and AT & T could appeal, the decision will have far-reaching effects on the entire United States telecommunications world. This is how the following companies could be affected:

    AT & T
    If the agreement is approved: AT & T will move quickly to complete its $ 85 billion deal for Time Warner. AT & T says it intends to close less than a week after an agreement is approved, allowing a brief process by the appellate court to order a stay.

    If the agreement is blocked: AT & T will not be able to buy a large content company. You can try to buy a part of Time Warner if you can not buy the whole company. AT & T could also direct its attention (and capital) towards strengthening its network and preparing for next-generation wireless technology.

    Time Warner
    If the agreement is approved: CEO Jeff Bewkes will transition his work, collecting millions in his exit as part of a change of control employment package. The Time Warner brand will leave, after the extinction of Time Warner Cable last year.

    If the agreement is blocked: Time Warner will probably need another buyer, having prepared to sell for almost the last two years. Verizon, a company that could afford to buy Time Warner, may have no interest. Comcast would definitely pass. Could a technology company finally intensify and buy an important content player, perhaps for a discount price?

    If the agreement is approved: Comcast plans to launch an offer on Wednesday with Disney to buy some Twenty-First Century Fox assets, which include cable networks, 39 percent of British satellite television provider Sky Plc and Indian media conglomerate Star if an approved agreement is reached, according to the family of the people with the matter. While there are no guarantees that the Comcast-Fox agreement would pass the regulatory approval, Comcast would feel good about its possibilities.

    If the agreement is blocked: leaving aside any loopholes in the dominant language, Comcast does not plan to outstrip Disney's offer for Fox and may try to use a bidding war for Sky as a lever to extract certain assets from Disney.
    If the agreement is approved, Rupert Murdoch will become a richer man. Comcast intends to bid around $ 60 billion in cash, beating Disney's $ 52 billion stock offer.

    If the deal is blocked: Fox still has Disney's $ 52 billion offer on hand. Fox will proceed to obtain the approval of the shareholders for that offer. Comcast does not plan to look for a final offer.

    If the agreement is approved: Disney will have to decide if it is willing to improve its offer for Fox. Disney could decide to raise its offer and change the asset combination of all cash to cash and shares.

    If the agreement is blocked: Disney will proceed with its acquisition of Fox. While AT & T's acquisition of Time Warner does not necessarily make Disney's deal for Fox more or less likely, a lawsuit against AT & T would decrease ostensibly the possibilities of a Fox-Disney agreement from a regulatory point of view.

    CBS / Viacom
    If the agreement is approved: CBS and Viacom have set limits to the negotiation of a merger that the controlling shareholder National Amusements has been pushing. If an agreement is approved, both companies could theoretically have other options, such as selling to Verizon, Charter or a combined Sprint / T-Mobile, in the future.

    If the agreement is blocked: Viacom may feel more pressure to merge with CBS because their options will be limited. Time Warner would again be a merger option for both companies. But the leadership of any merged company would still have to be solved, and that will not be an easy process.

    If the agreement is approved: Theoretically, Verizon would have a clear opening to buy a large content company to compete with AT & T. This could be CBS, Viacom (or a combined CBS-Viacom), Discovery or something else. But Verizon CEO Lowell McAdam told CNBC last month that buying a large pay-TV company "is not our strategy," and the appointment of successor Hans Vestberg, now CTO of Verizon, suggests that the company is more interested in implementing 5G than in copying AT & T.

    If the agreement is blocked: Verizon shares may rise because AT & T, its biggest rival, will have wasted the last 18 months in an agreement that can not happen.

    If the agreement is approved: Charter will have a clear path to buy a content company if it wants to go down that road. Charter may also find negotiations with Time Warner a bit more challenging if the government turns out to be correct, and AT & T threatens to delay Time Warner programming if it does not get higher programming fees.

    If the agreement is blocked: it is likely that Charter will not attempt to acquire large content and continue to be rumored as an acquisition target for Verizon or a combined Sprint-T-Mobile, if that agreement is approved.

    If the agreement is approved: the president of Liberty Media and shareholder of Discovery, John Malone, has long speculated about grouping smaller content companies and potentially combining them with a cable or wireless provider. It has interests in Discovery, Lionsgate, and Charter, among other companies. An approved agreement may push you even further in the direction of massive consolidation among your assets, if not others.

    If the agreement is blocked: this is not good news for the smaller content companies. Discovery CEO David Zaslav told the New York Times in March that the approval of the agreement is important for the survival of the current media ecosystem.

    Sprint / T-Mobile
    If the agreement is approved: Sprint and T-Mobile, which announced plans to merge in April, will likely argue that AT & T will become even bigger and stronger as a competitor as both companies try to persuade US regulators. UU To allow a merger. The approval of the agreement could also lead to the acquisition of a content company within several years, although obstacles to integration and capital spending in a combined network of a company are likely to take precedence.

    If the deal is blocked, Sprint and T-Mobile could lose a point of debate in their attempt to approve a merger, since AT & T will not get bigger. Even so, if companies can obtain an approved merger (which can be difficult), the largest wireless companies No. 3 and No. 4 could emerge as a stronger competitor of weakened AT & T.