Why merging healthcare organizations should pay attention to AT&T and Time Warner

The last few months in mergers and acquisition (M&A) activity in healthcare have been dominated by massive deals proposed across sectors—like drugstore chain CVS Health wanting to buy health insurer Aetna for $69 billion. What those companies should watch for, writes Morning Consult’s Jon Reid, is the result of the case challenging a merger with similar dynamics: the combination of AT&T and Time Warner.

Like the CVS-Aetna and Cigna-Express Scripts deals, the merger between AT&T and Time Warner would be a vertical integration, not the horizontal mergers the DOJ has fought in recent years like the abandoned combination of insurance giants Anthem and Cigna. If the $85 billion AT&T-Time Warner deal is blocked on antitrust grounds, however, the DOJ’s strategy may change.

“The federal agencies have not litigated a vertical merger case in roughly 40 years,” William Kovacic, a law professor at George Washington University and a Federal Trade Commission member from 2006 to 2011, said to Morning Consult. If the DOJ wins in the AT&T-Time Warner case, “the government will have a more confident basis for challenging other vertical deals in the future,” he said.

So far, however, the DOJ hasn’t challenged any of the recently announced megamergers.

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