What: AT&T obtained approval from the Department of Justice to acquire Time Warner for US $85 million after a six-week trial.
Why it matters: This was the first time in four decades that the government directly intervened in a vertical merger, gaining the attention of corporations who feared a change in the course of the history of the media industry.
One of the biggest M&A decisions happened yesterday. A federal district court has allowed AT&T to acquire Time Warner, making the Trump administration's Justice Department the loser in a high-profile legal case that will be taught in law schools for years to come.
On Tuesday June 12, in a D.C. courtroom packed with lawyers, journalists and investors, Judge Richard Leon ruled in favor of a deal that had been pending since October 2016 to go through with no conditions after years of negotiation, political uncertainty, and a six-week trial earlier this year. He declared: “The court has now spoken and the defendants have won.”
It's the first time since 1970 that the Justice Department has sued to block a "vertical" merger, that is, the combination of two companies that do not directly compete with one another. Time Warner is a content producer while AT&T is a content distributor via its satellite services and mobile phone business.
The outcome was of interest not only to followers of AT&T and Time Warner; at stake was not only the deal that would bring together the telecom and content giants, but also a precedent for deals of a similar scale. It is a landmark for the entire industry, as companies like Disney, Fox, and Comcast waited to see how the case turned out before moving ahead with their own mega deals, and it signaled an unusual tack under president Donald Trump who says he promotes business and opposes regulation. As expected, barely 24 hours after the ruling, Comcast has announced a new bid for assets 21 Century Fox has agreed to sell to Disney. With US $35 a share in cash, the company is outbidding Disney by 19%.
The DOJ sued last year to block the merger based on the argument that prices for consumers would go up too much if the companies were allowed to merge, as AT&T could charge rival distributors more for Time Warner content. AT&T says they expect costs to consumers to go down since the point of owning content is to get widespread distribution, which brings in affiliate fees and advertising revenue and they point out that even if the governments math is correct it would be a matter of cents more per subscriber per month.
Properties AT&T Will Own in the U.S. After Acquiring Time Warner
In the U.S, AT&T also has an ad sales unit with a particularly strong emphasis on addressable advertising. In time, Time Warner's myriad of content channels can be offered to advertisers with additional targeting capabilities through AT&T's detailed information on more than 156 million cell-phone subscribers in the U.S. This is of particular importance in the Hispanic market, which heavily over-indexes in cell phone usage. The following infographic (Time Warner on the top left corner) shows the major companies owning TV and entertainment properties:
A closer look at the list of companies, however, allows us to come up with a detailed list of properties that AT&T will use to survive in the increasingly competitive media landscape:
- HBO and Cinemax, as part of Home Box Office Inc.
- HBO Latino
- TBS, truTV, TNT, Studio T, and TCM, as part of Turner Entertainment Networks
- Adult Swim and Cartoon Network, as part of the TBS, Inc. Animation, Young Adults & Kids Media (AYAKM) division
- CNN and HLN, as part of CNN News Group,
- CNN en Español
- The websites Super Deluxe, Beme Inc., and CallToons
- DC Entertainment; DC Films, including all of the “Batman” movies
- Turner Broadcasting International, Turner Sports, including the website Bleacher Report and the rights to March Madness and NBA playoffs
- The CW (50%)
- Warner Bros. Animation
- Hanna-Barbera Cartoons
- Fandango Media (30%)
- Warner Bros. Consumer Products, Warner Bros. Digital Networks, Warner Bros. Theatre Ventures, Warner Bros. Pictures International, Warner Bros. Museum, Warner Bros. Studios, Burbank, Warner Bros. Studios, Leavesden, Warner Bros. Studio Tours, Warner Bros. Pictures, Warner Animation Group, Warner Bros. Family Entertainment
- NonStop Television
- New Line Cinema
- Turner Entertainment Co.
- WaterTower Music
- Castle Rock Entertainment
- The Wolper Organization
- Blue Ribbon Content
- Warner Bros. Television, Warner Horizon Television, Warner Bros. Television Distribution, Warner Bros. Home Entertainment, Warner Bros. Interactive Entertainment
- Alloy Entertainment
In addition, AT&T was already in control of the following:
- Ameritech, Ameritech Cellular, Ameritech Interactive Media Services, Ameritech Publishing
- AT&T Communications (2017), AT&T International, AT&T Originals, AT&T Alascom, AT&T Business Internet, AT&T CallVantage, AT&T Computer Systems, AT&T FSM Library, AT&T GoPhone, AT&T Information Systems, AT&T Intellectual Property, AT&T Labs, AT&T Mobility, AT&T Technologies, AT&T Wireless Services
- BellSouth, BellSouth Advertising & Publishing, BellSouth Long Distance, BellSouth Mobility DCS, BellSouth Telecommunications
- Centennial Communications
- CenturyTel of the Midwest-Kendall
- Cricket Wireless
- Fullscreen (company)
- Illinois Bell, Indiana Bell, International Bell Telephone Company, Michigan Bell, Nevada Bell, Ohio Bell, Wisconsin Bell
- Otter Media
- Pacific Bell, Pacific Bell Directory, Pacific Bell Wireless
- QLT Consumer Lease Services
- Rooster Teeth
- SBC Long Distance, SBC Telecom
- Southwestern Bell, Southwestern Bell Internet Services, Southwestern Bell Mobile Systems, Southwestern Bell Yellow Pages
- Unix System Laboratories
- AT&T U-verse
- YP Holdings
AT&T Could Win Big in Latin Markets After Acquiring Time Warner
AT&T's big win in the U.S. could be paralleled in Latin America thanks to the popularity of properties owned both by AT&T and Time Warner. According to Market Realist, HBO and Cinemax generate a majority of their revenues in international markets through subscription to its OTT (over-the-top) services. In fiscal 2Q16, HBOs revenues rose by double digits, indicating its popularity. After success in Mexico, the company launched HBO Now in Argentina, Spain, and Brazil.
AT&T in Latin America
AT&T has a significant footprint in Latin America since it acquired DirecTV. Time Warners acquisition by AT&T would result in combining Time Warners premium content with DirecTVs pay-TV operations in Latin American markets, which could boost its pay-TV subscriber base. However, AT&T planned to launch an IPO for DirecTV Latin America in March. Even though the IPO was suspended in April, the company might reconsider it in order to pay down some of the debt it'll acquire after the Time Warner acquisition.
With the acquisition, AT&T will have access to Time Warner-owned properties centered on Latin American audiences:
- HBO Latin America
- HBO Brazil
- Cinemax Latin America
- Turner Broadcasting System Latin America
- TNT Latin America
- Warner Bros Pictures International (Spain, Argentina, Brazil, Mexico)
In addition, AT&T owns Nextel, Iusacell, and Unefón in Mexico, as well as Univel in Argentina.
Coronavirus: What’s behind Latin America’s oxygen shortages?
Before the clinic ran out of oxygen, Maria Auxiliadora da Cruz had been showing encouraging signs of progress against Covid-19. On 14 January, her oxygen levels had been above the normal level of 95% but, within hours of being deprived of that vital resource, her stats plummeted to 35%.
At this point, patients would normally be given intubation and oxygen by machine. Instead, the 67-year-old retired nurse died. “It was horrible,” her grieving daughter-in-law Thalita Rocha told the BBC. “It was a catastrophe. Many elderly patients began to deteriorate and turn blue.”
In an emotional video that went viral on social media, she described what was happening at Policlínica Redenção in the northern Brazilian city of Manaus. “We’re in a desperate situation. An entire emergency unit has simply run out of oxygen… A lot of people are dying.”
Brazil has the world’s second-highest Covid death toll with more than 221,000 fatalities. In Manaus, the health system has collapsed twice during the pandemic and deaths doubled between December and January.
Now there are fears the lack of oxygen supplies seen there could unfold elsewhere in Brazil and even in other parts of Latin America, where a second wave of Covid-19, in many countries, is proving to be worse than the first one.
In Peru, some hospitals have been unable to meet the demand brought by a steep rise in cases in recent weeks. As a result, patients’ relatives have had to hunt for oxygen in the black market. In some cases, they come back with nothing.
A black market is also thriving in Mexico, where more than 155,000 have died in the pandemic. To make things worse, there have been reports of thieves taking oxygen cylinders from hospitals and clinics.
According to the World Health Organization (WHO) one in five Covid-19 patients will require oxygen. In severe cases, this rises to three in five. The organisation says some hospitals have seen demand for oxygen increase between five and seven times above normal levels because of the influx of patients with severe and critical disease.
The most dramatic situation in the world is in Brazil, where nearly 340,000 oxygen cylinders are needed every day, according to the Covid-19 Oxygen Needs tracker. The online tool helps estimate the scale of the challenge for policymakers and was developed by the Covid-19 Respiratory Care Response Coordination partnership which includes Path and Every Breath Counts.
Also according to the tracker, Mexico and Colombia each need more than 100,000 cylinders daily.
So how does a hospital run out of oxygen?
Oxygen has been considered an essential medicine by the WHO since 2017, but Lisa Smith, from Path’s market dynamics program, says ensuring adequate supply depends on many “components” falling into place.
This includes not only sources of production, but also training to enable medical staff to monitor and manage oxygen levels.
Medical oxygen is produced in large quantities at plants and delivered to hospitals in two ways: either in bulk in liquid tanks or as pressurised gas in cylinders containing smaller volumes.
Liquid oxygen is the cheapest and best technology available but it requires hospitals to have the right infrastructure to pipe oxygen to the patient’s bedside. This is common in developed countries such as the US and those in Europe.
Cylinders do not require pipes and can be delivered to clinics without a sophisticated infrastructure. However, their distribution on a smaller scale means they are less cost-effective, in addition to being cumbersome to transport and handle, which also carries an increased risk of cross-contamination.
Another source of production is on-site oxygen plants, which produce oxygen to be piped or compressed into cylinders. The WHO says it is currently trying to map how many such plants exist in the countries.
After Manaus reached crisis point, oxygen donations were sent from the federal government and other states – as the local providers said they were unable to increase production – and across the border from Venezuela. But even transporting them became a problem.
Jesem Orellana, an epidemiologist at the Oswaldo Cruz Foundation in the Brazilian city of Rio de Janeiro, said the risk of shortage continued and was exacerbated by global demand.
According to Path, medical oxygen accounts for just 5-10% of the world’s oxygen production. The rest is used in various industries, such as mining, chemical and pharmaceutical.
“We need to think about oxygen as much as we think about electricity, water or other essential utilities,” says Ms Smith. “This can’t be something that we’re only concerned about when it’s bad, because when it’s bad, people will die.”
In the meantime, there are concerns that the strain of Covid-19 on oxygen supplies could have a knock-on effect for the treatment of other diseases.
“Covid has shown us just how essential it is in countries where there is no vaccine against Covid, no medicines,” says Leith Greenslade, who leads the Every Breath Counts Coalition. “Often, it’s down to whether you get oxygen or not, whether you live or die.”
Read from source: https://www.bbc.com/news/world-latin-america-55829424
Honduran abortion law: Congress moves to set total ban ‘in stone’
Parliament in Honduras has initially approved a bill that will make it virtually impossible to legalise abortion in the country.
The new measure will require at least three-quarters of Congress to vote in favour of modifying the abortion law, which is among the strictest in world.
Honduras forbids abortion under any circumstance, even rape or incest.
Its latest move comes in response to Argentina legalising abortion last month.
Across Latin America, there has been increased pro-choice campaigning, known as the “green wave”, based on the colour worn by protesters.
The new legislation in Honduras hinges on an article in the constitution that gives a fetus the same legal status of a person. Constitutional changes have until now been permitted with a two-thirds majority, but the new legislation raises that bar to three-quarters within the 128-member body.
The measure still needs to be ratified by a second vote. However, support was clear on Thursday: with 88 legislators voting in favour, 28 opposed and seven abstentions.
Honduras has a stanchly conservative majority, which referred to the measure as a “shield against abortion”.
“What they did was set this article in stone because we can never reform it if 96 votes are needed [out of 128]”, opposition MP Doris Gutiérrez told AFP news agency.
Mario Pérez, a lawmaker with the ruling party of President Juan Orlando Hernandez, formally proposed the change last week, calling it a “constitutional lock” to prevent any future moderations of the abortion law.
“Every human being has the right to life from the moment of conception,” said Mr Pérez.
Ahead of the vote, UN human rights experts condemned the move, saying in a statement: “This bill is alarming. Instead of taking a step towards fulfilling the fundamental rights of women and girls, the country is moving backwards.”
Abortion has been constitutionally banned in Honduras since 1982.
In 2017, lawmakers voted on decriminalising it in the case of rape, incest or when there was danger to the mother or the fetus, but the move was roundly rejected.
Nicaragua, El Salvador and Haiti also have complete bans on abortion, but Honduras is the only country to also prohibit the use of emergency contraceptives in all cases, including after rape.
Cuba, Uruguay, Guyana and Argentina are the only Latin American countries to permit abortion in the first weeks of pregnancy.
Read from source: https://www.bbc.com/news/world-latin-america-55764195
Mynor Padilla: Killer of anti-mining activist pleads guilty
The ex-security chief at a mine in Guatemala, Mynor Padilla, has pleaded guilty to killing an anti-mining activist in 2009.
Adolfo Ich was killed at the Fénix mine, which was owned at the time by a subsidiary of Canadian mining giant Hudbay Minerals.
He had been campaigning against the mining project and for his community’s land rights.
Germán Chub, a bystander, was also shot, leaving him paralysed.
The guilty plea comes at a retrial after Padilla was cleared of murder at a previous trial.
What happened in September 2009?
The Fénix nickel project was owned by the Guatemalan Nickel Company (CGN), a subsidiary of Toronto-based Hudbay Minerals.
CGN wanted to develop the mine, but the indigenous Maya community objected, arguing that much of the company’s land belonged to them.
The company said it engaged in talks to negotiate their resettlement but members of the Maya community said they were threatened with forced evictions.
On 27 September 2009, security guards at the mine attacked members of the community with machetes and firearms, according to witnesses.
Adolfo Ich was killed, Germán Chub was left paralysed, and at least seven more people were injured.
What was Mynor Padilla’s role?
Mynor Padilla was the chief of security at the Fénix project and witnesses said he was the key man in the attack on 27 September 2009.
Hudbay defended its personnel, alleging that members of the Maya community had turned on each other and that their security staff had acted in self-defence.
Following a three-year murder trial Padilla was acquitted, much to the outrage of the victims’ families who launched an appeal.
What’s the latest?
The court of appeal overturned the acquittal and ordered a retrial which began in December 2020.
After having for years maintained his innocence, Mynor Padilla entered a guilty plea which was accepted by the court on Wednesday.
A lawyer for Adolfo Ich’s widow in a civil lawsuit against Hudbay Minerals in Canada called it a “momentous day”.
Why does it matter?
There are three civil lawsuits under way against Hudbay Minerals in Canada, in connection with the Fénix mine.
One of them was filed by Adolfo Ich’s widow, Angélica Choc, who alleges that the company failed to take adequate precautions to ensure that human rights abuses would not be perpetrated by Hudbay’s security personnel.
In 2013, a court in Ontario allowed the lawsuits to proceed, making it the first time that foreign claimants were allowed to pursue a lawsuit against a Canadian company in Canada for alleged human rights abuses.
Cory Wanless, one of the lawyers for the plaintiffs, said that following Mynor Padilla’s guilty plea “it will be difficult for Hudbay to continue to argue that it does not bear responsibility for the killing and shooting”.
Hudbay Minerals has released a statement saying it would “review the court’s decision once it is released”, which is due to happen later this month.
The company, which sold the Félix mine to Swiss-based Solway Group in 2011, also stated that “any agreements made in the Guatemalan court do not affect our view of the facts of Hudbay’s liability in relation to civil matters currently before the Ontario court”.
Read from source: https://www.bbc.com/news/world-latin-america-55573682
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