US files suit to block US$85b AT&T-Time Warner merger

[WASHINGTON] AT&T said Monday that US antitrust enforcers filed suit to block its merger with Time Warner, setting up a major court battle over the US$85 billion tie-up.

The deal announced more than a year ago would merge vast content of Time Warner units like premium cable channel HBO and news channel CNN with the massive internet and pay TV delivery networks of AT&T.

The statement from AT&T came ahead of an expected announcement from the US Justice Department.

AT&T reaffirmed its plans to challenge the government's lawsuit, arguing that its plan is a "vertical" merger without competitive overlap.

"Today's DOJ lawsuit is a radical and inexplicable departure from decades of antitrust precedent," AT&T general counsel David McAfee said.

"Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently. " Mr McAfee added: "We are confident that the court will reject the government's claims and permit this merger under longstanding legal precedent."

AFP