Patrick T. Fallon | Bloomberg | Getty Images
Randall Stephenson, chairman and chief executive officer of AT&T Inc., left, speaks while Jeffrey ‘Jeff’ Bewkes, chairman and chief executive officer of Time Warner Inc., listens during the WSJDLive Global Technology Conference in Laguna Beach, California.
The Justice Department will appeal the AT&T-Time Warner merger approval, according to a court document filed Thursday.
Shares of AT&T slipped more than 1 percent in after-hours trading Thursday.
AT&T General Counsel David McAtee said the company was surprised by the appeal.
“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances,” McAtee said in a statement. “We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”
In June, a federal judge ruled that the $85.4 billion deal was legal and imposed no conditions on the merger.
At the time, the Justice Department expressed its disappointment with the ruling. The government argued that the deal would make the pay-TV market “less competitive and less innovative.”
But in his nearly 200-page opinion, U.S. District Court Judge Richard Leon determined that the government failed to meet its burden to establish that the deal would significantly decrease competition.
Since announcing its bid in October 2016, AT&T has maintained that buying Time Warner would help the company compete against tech companies like Amazon and Netflix. AT&T, the No. 2 wireless carrier in the U.S., said the deal would help the company attract customers by bundling entertainment with mobile service.
Leon had warned the government against using a stay to postpone the deal’s completion, saying it would be “unjust” and “cause certain irreparable harm to the defendants.” The Justice Department ultimately decided against filing to delay the closing of the deal, which was completed within days of the favorable ruling.
While the judge said an appeal was “fair game,” Leon pointed out that the investigation and legal proceedings had run up a “staggering cost” for both the companies and the government.
This story is developing. Please check back for updates.