Mergers & Antitrust Law News

U.S. Set For First Merger Trial Post AT&T-Time Warner Loss

Sept. 27, 2019, 3:15 PM

The Justice Department is headed back to court in its latest attempt to derail travel technology company Sabre Corp.'s $360 million deal with Farelogix Inc. for its first trial since losing a bid to block AT&T Inc.'s deal with Time Warner.

DOJ trial lawyers are set to appear in a Delaware federal court Jan. 27, 2020, to prevent Sabre from acquiring Farelogix, an airline distribution technology company, according to a Sept. 26 scheduling order.

The bench trial will be the first time DOJ attorneys have appeared in a federal court to block a deal since the government’s failure to undo AT&T’s merger with Time Warner in February 2019.

Both a U.S. Court of Appeals panel and a U.S. District court judge rejected the DOJ’s allegations that AT&T’s $85 billion deal with Time Warner would be anti-competitive. The government said the combined company would result in higher prices for consumers since AT&T would gain greater negotiating leverage and push rival cable companies to pay more for Time Warner’s programming.

The DOJ, under antitrust chief Makan Delrahim, sued to block the Sabre-Farelogix deal in August 2019, saying the merger between the two travel technology companies would result “in higher prices, reduced quality, and less innovation for airlines and, ultimately, traveling American consumers.”

Historically, merger suits against companies operating horizontally in the same industries, like the Sabre-Farelogix deal, are easier for the government to litigate successfully.

Vertical deals, in which a company buys a supplier, like the AT&T-Time Warner merger, are traditionally much harder for the government to successfully block since courts generally conclude such deals are pro-competitive and help lead to lower consumer prices.

The case is United States of America v. Sabre Corporation et al., D. Del., # 1:19-cv-01548-LPS, Scheduling Order 9/26/19

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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