Meanwhile, AT&T has opposed a set of estimations proposed by an economics professor Carl Shapiro from the University of California in Berkeley. In the antitrust trial that is expected to begin on March 19, Shapiro is said to be one of the government’s expert witnesses. According to AT&T, even if there is a price hike post-merger, customers would pay not more than 45 cents, indicating the deal would cause minimal consumer harm. AT&T sees this merger as an effective strategy to battle rivals like Comcast (CMCSA) and Netflix (NFLX) and increase the consumer base.
This mega-deal is what is known as a vertical merger as it involves two companies that are not direct competitors. Vertical mergers have never been blocked in the last 40 years.
Though there is a lot of uncertainty surrounding the deal, it is not sure whether this deal can survive the regulatory challenge. Even without Time Warner, AT&T will continue to be an attractive investment.