WASHINGTON (Reuters) - The U.S. Justice Department said on Thursday it had filed a lawsuit aimed at stopping Quad/Graphics Inc from buying LSC Communications, two of the biggest companies which print books, magazines, and catalogs.

The Justice Department’s Antitrust Division said that the two companies were each other’s biggest rivals, citing internal documents that refer to a price war between them and a “two-horse race between LSC and Quad.”

The $1.4 billion deal was announced in October 2018.

“American publishers and retailers rely on Quad and LSC to print and distribute billions of magazines, catalogs, and books each year,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “If this deal were allowed to proceed, Quad would dominate the markets for magazine, catalog, and book printing services and be able to raise prices.”

In its complaint, filed in federal court in Illinois, the Justice Department said that Quad and LSC were the only realistic option for many publishers because of their complex printing equipment. It cited at least one bidding war between the two that resulted in the offer of a $10 million signing bonus.

The complaint also noted that executives of the two companies had complained about the competition, with one lamenting that a publisher was “exploiting the fact that LSC [and] Quad[‘s] CEO’s want to beat each other into oblivion.”

A spokeswoman for Quad declined comment; no one from LSC was immediately available for comment. </s> WASHINGTON (Reuters) - The U.S. Justice Department said on Thursday it had filed a lawsuit aimed at stopping Quad/Graphics Inc from buying LSC Communications, two of the biggest companies that print books, magazines and catalogs.

The Justice Department’s Antitrust Division said the two companies were each other’s biggest rivals, citing internal documents that refer to a price war and a “two-horse race between LSC and Quad.”

The $1.4 billion deal was announced in October 2018.

“American publishers and retailers rely on Quad and LSC to print and distribute billions of magazines, catalogs and books each year,” said Makan Delrahim, an assistant attorney general in the Antitrust Division. “If this deal were allowed to proceed, Quad would dominate the markets for magazine, catalog and book printing services and be able to raise prices.”

LSC Communications said in a statement the Justice Department “has reached the wrong conclusion in its assessment of the transaction,” adding that it will join Quad “in vigorously defending the lawsuit in court.”

Quad’s chief executive, Joel Quadracci, said the company is “fully committed to defending the DOJ’s lawsuit in court.”

In its complaint, filed in federal court in Illinois, the Justice Department said Quad and LSC were the only realistic option for many publishers because of their complex printing equipment. It cited at least one bidding war between the two that resulted in the offer of a $10 million signing bonus.

The complaint also noted that executives of the two companies had complained about the competition, with one lamenting that a publisher was “exploiting the fact that LSC [and] Quad[‘s] CEO’s want to beat each other into oblivion.” </s> Law360 (June 20, 2019, 10:00 PM EDT) -- The U.S. Department of Justice on Thursday sued Quad/Graphics Inc. to halt the printing company’s planned $1.4 billion acquisition of a competitor, LSC Communications Inc., arguing the combined businesses would have too much market power. The two printing companies are each other’s “#1 competitor,” and a merger would leave customers seeking printing services with essentially only one option, prosecutors argued. “If this deal were allowed to proceed, Quad would dominate the markets for magazine, catalog, and book printing services and be able to raise prices and reduce quality at the expense of publishers, retailers, and, ultimately, American consumers,” Makan Delrahim of...

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TRY LAW360 FREE FOR SEVEN DAYS </s> WASHINGTON, June 20 (Reuters) - The Justice Department said on Thursday that it had filed a lawsuit aimed at stopping Quad/Graphics Inc from buying LSC Communications .

The $1.4 billion deal was announced in October 2018. Both companies print books, magazines, and catalogues. (Reporting by Diane Bartz Editing by Susan Thomas) </s> A federal judge Monday blocked the proposed merger of health insurers Aetna Inc. and Humana Inc. on antitrust grounds, a potentially fatal legal blow to the $34 billion deal.

U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition.

The judge said the transaction could mean higher prices and reduced services for seniors who purchase the private Medicare plans known as Medicare Advantage. He also said the merger would harm competition on public insurance exchanges in parts of Florida.

Aetna and Humana didn't immediately respond to requests for comment. Shares of the companies fell 2.2% and 2.4%, respectively, in midday trading.

Aetna and Humana announced their planned merger in July 2015, saying the deal would allow them to offer more cost-effective products by combining their strengths and becoming more efficient. Justice Department antitrust enforcers filed a lawsuit challenging the transaction a year later. A trial took place last month.

The Aetna-Humana deal is one of two major health insurance mergers being challenged by the Justice Department. The department simultaneously sued to block the proposed combination of Anthem Inc. and Cigna Corp. A trial in that case took place in the same courthouse and a different judge, Amy Berman Jackson, is expected to rule soon.

The lawsuits were among the last major law enforcement actions taken by Obama administration antitrust officials. </s> AT&T announced Thursday evening that it has completed the acquisition of Time Warner. The announcement comes two days after a judge ruled that the deal does not violate antitrust laws.

"The content and creative talent at Warner Bros., HBO and Turner are first-rate. Combine all that with AT&T's strengths in direct-to-consumer distribution, and we offer customers a differentiated, high-quality, mobile-first entertainment experience," Randall Stephenson, chairman and CEO of AT&T, said in a statement. "We're going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers."

Time Warner head Jeff Bewkes is now officially the former chairman and CEO of the company; he will be a senior advisor during a transition period, AT&T said. Bewkes' direct reports will now report to John Stankey, who is the CEO of AT&T's media business.

Earlier Thursday, the Justice Department said in a court filing that it would not ask for a stay to stop the merger, and the companies and the Justice Department together said that the deal could be closed immediately.

On Tuesday, Judge Richard Leon had approved AT&T's $85 billion acquisition of Time Warner, rejecting the government's antitrust objections.

The Justice Department may still appeal the judge's ruling in the case.

"This does not mean we have made a decision about an appeal," a Justice Department spokesperson said. "We are still evaluating options."

Related: Judge approves $85 billion AT&T-Time Warner deal

AT&T and Time Warner had previously agreed not to close until six days after a ruling, to give the government time to consider asking for a stay.

The deal will unite Time Warner's TV shows and movies with AT&T's enormous distribution system, including cell phone and satellite networks.

Leon took apart the government's case in his opinion. In an unusual move, he warned the government against asking him for a stay. He said a stay would be "manifestly unjust" because it would effectively kill the acquisition.

AT&T argued the deal was critical to its survival in an industry increasingly dominated by Netflix, Facebook and other newcomers. The Justice Department said a combination would harm competition and raise prices for consumers.

Related: Which media companies are still up for grabs?

Officials in the Justice Department's antitrust division were "disappointed but not surprised" because the judge seemed to cast doubt on their arguments during trial, a source with knowledge of the department's thinking said.

Leon also told Justice Department lawyers in court that he did not believe the government was likely to win an appeal on the merits.

In a letter to the Justice Department, AT&T and Time Warner's lead lawyer, Daniel Petrocelli, laid out AT&T's plans for managing the Turner networks, which include CNN, HLN, TNT and TBS.

Turner will be managed as a "separate business unit," and AT&T will have no role in setting Turner's prices with distributors, the letter said. The number of Turner employees, pay levels and benefits "will remain largely unchanged," it said.

If a federal appeals court agrees to hear the case, it will probably go to a three-judge panel. A successful Justice Department appeal could undo the merger. If the government loses its appeal, it could still take the matter to the Supreme Court.

AT&T's acquisition of Time Warner is known as a vertical merger because the two companies do not directly compete with each other.

The Supreme Court has not heard a vertical merger case since the 1970s, and antitrust lawyers are eager for the high court to clarify modern standards on antitrust economics and law. </s> NEW YORK – Two health care mega mergers appeared to have died in one day.

Aetna and Humana said Tuesday morning that they’re calling off their $34 billion merger, and just hours later Cigna said it’s calling off its $54 billion deal with Anthem.

Both deals were targeted by the Justice Department and were recently blocked by federal judges, citing antitrust concerns.

Aetna said Tuesday it will pay Humana a $1 billion breakup fee.

Anthem will owe Cigna a $1.85 billion breakup fee, according to their agreement terms.

Cigna is also seeking damages from Anthem in an amount totaling more than $13 billion, according to a public filing filing issued Tuesday. The filing states that damages “includes the lost premium value to Cigna’s shareholders caused by Anthem’s willful breaches of the Merger Agreement.”

Anthem, however, insists the deal is not dead. The company said in a statement Tuesday that Cigna “does not have a right to terminate the agreement. Therefore, Cigna’s purported termination of the Merger Agreement is invalid.”

Cigna said in its public filing Tuesday that it “notified Anthem that it has terminated the Agreement and Plan of Merger.” Cigna also said it filed a suit against Anthem in a Delaware court to ensure Anthem is not permitted to extend the kill date of their merger agreement. Anthem claims the termination date has already been extended to April 30, 2017.

That deal has been rocked by infighting between the companies. Cigna has long hinted it was searching for a way out of the takeover.

Anthem vowed to fight the federal judge’s decision to block the deal, but Cigna said it did not intend to move forward.

When then-Attorney General Loretta Lynch sued all four companies last year to block the two mergers, she said the combinations ran the risk of “drastically constricting competition” in health care.

The two mergers would have left the health insurance industry dominated by only three giant insurers. The third company is UnitedHealth. </s> The Justice Department approved T-Mobile US Inc.’s merger with Sprint Corp. after the companies agreed to create a new wireless carrier by selling assets to satellite-TV provider Dish Network Corp. The landmark antitrust agreement seeks to address concerns that the combination of T-Mobile, the nation’s No. 3 carrier by subscribers, and No. 4 Sprint will drive up prices for consumers. It would leave more than 95% of American cellphone customers with the top three U.S. operators.

A deal brokered by the Justice Department will require Dish, which has been sitting on valuable airwaves, to build a 5G network for cellphone customers. To help it get started, T-Mobile will sell Sprint’s prepaid brands to Dish and give access to the combined carrier’s network for seven years. “The remedies set up Dish as a disruptive force in wireless” with the pieces needed for the company to have a cellphone service that is ready to go, Makan Delrahim, the Justice Department’s antitrust chief, said in a news conference. Critics of the arrangement include a group of state attorneys general that broke with the Justice Department and have filed an antitrust lawsuit seeking to block the more than $26 billion merger. Five states that weren’t part of the lawsuit joined the federal government in the settlement announced Friday.

“Why scramble so much to create a fourth competitor when you already have one?” said Samuel Weinstein, an assistant law professor at the Cardozo School of Law at Yeshiva University who worked previously in the Justice Department’s antitrust unit. The deal gives Dish, a satellite-TV provider, about 9 million Sprint prepaid cellphone customers and additional wireless spectrum. Those subscribers, which mostly come from its Boost Mobile business, represent about one-fifth of Sprint’s customer base. Dish’s service, which could keep the Boost brand or take on a new name, would also be able to move from pay-as-you-go plans to postpaid service, which tends to be more profitable. T-Mobile and Sprint must also give Dish access to at least 20,000 cell sites and hundreds of retail locations. The new T-Mobile must provide “robust access” to its network, the Justice Department said. The union of T-Mobile and Sprint, years in the making, would create a wireless company surpassing 90 million U.S. customers, closing the gap with Verizon Communications Inc. and AT&T Inc., which each have roughly 100 million wireless customers. It also would fulfill a long-held goal of Japan’s SoftBank Group Corp., which owns most of Sprint, and Deutsche Telekom AG, which controls T-Mobile. Shares of T-Mobile rose on the news and are trading near all-time highs. Sprint shares also were higher. Dish, whose stock price has slumped this week on news of the arrangement, were up Friday.

Federal Communications Commission Chairman Ajit Pai, who had previously backed the deal, said Friday the Justice Department settlement, coupled with T-Mobile and Sprint’s earlier commitments to deploy a nationwide 5G network, will preserve competition and advance U.S. leadership in rolling out next-generation networks. U.S. carriers have been battling for customers in the $180 billion voice-and-data market, where growth has slowed now that the companies have rolled out unlimited data plans and most Americans have upgraded to smartphones.

The federal approval for T-Mobile and Sprint caps a more than yearlong review of a combination that fell apart twice in the past five years over terms of the deal or fears that the Justice Department would object. The Justice Department, under the Obama administration, told the companies that shrinking from four to three national providers was anticompetitive. The companies tried again under Trump appointees to push the deal through, ultimately agreeing to divest assets to Dish to win approval. In its agreement with the government, T-Mobile promised not to raise prices for three years and cover 97% of the U.S. population with 5G service in three years. T-Mobile has been adding millions of customers at the expense of its rivals, pushing unlimited data plans and lower prices than the incumbents. Sprint, despite owning valuable airwaves, has been shedding millions of subscribers and has struggled to be profitable. T-Mobile surpassed Sprint to become the No. 3 player by subscribers and argued the acquisition of the smaller carrier’s airwaves would help speed its deployment of a 5G network so that it could better compete with Verizon and AT&T. Dish, which generated $13.6 billion in annual revenue last year, had about $13 billion of net debt before the deal. It will need to shell out billions of dollars in the coming years to absorb the wireless carriers’ castoff assets, build its own network and vie for customers. A group of states led by the attorneys general of New York and California are pressing ahead with an antitrust lawsuit seeking to block the combination, saying it would harm consumers. All the officials who joined the suit are Democrats; those who decided to support the Justice Department on Friday are Republicans. Letitia James, the New York attorney general, said the coalition of state officials seeking to block the deal oppose the Justice Department’s settlement. “We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers and innovation,” she said.

Mr. Delrahim said his office will share its settlement with the federal judge overseeing the states’ lawsuit. “Sometimes independent sovereigns do make independent determinations,” he said. The trial is scheduled to start in October. On Friday, T-Mobile and Sprint extended the deadline to close their deal, from July 29 to Nov. 1. T-Mobile said it expects to close its Sprint purchase in the second half of this year despite the states’ lawsuit. The Justice Department stopped sharing information with the Democratic attorneys general after they decided to file their lawsuit in June without notifying their federal counterparts, Mr. Delrahim said. “That was their choice, not ours,” he said. Under the deal, Dish will pay $1.4 billion for the Sprint customer accounts, most of which come from its Boost prepaid brand, and $3.6 billion three years later to buy Sprint spectrum licenses in the 800-megahertz range, which can travel long distances and cover rural areas. The new T-Mobile will have the option to lease back part of that spectrum for an additional two years after the airwaves sale closes. The companies have also agreed to negotiate for T-Mobile to lease Dish spectrum in the 600-megahertz range. Dish is set to start its wireless life with a base of Sprint’s pay-as-you-go customers, though carriers often struggle to keep those so-called prepaid subscribers. More than 4% of Sprint’s prepaid customers choose to drop their service or are disconnected for nonpayment each month, according to company filings. The deal creates a fake competitor, said Andrew Jay Schwartzman, a lecturer at Georgetown Law, adding that even if Dish builds out its own network it will take years. During that time, the three large carriers will be able to introduce 5G and lock in their subscriber bases, he said. “Rather than having Sprint as a weak fourth competitor, the combined companies will now face an extremely weak fourth competitor,” Mr. Schwartzman said. Sprint ended March with nearly $33 billion of net debt on its balance sheet. Even though it had more than 40 million customers, Sprint said during deal negotiations that it was in poor health and wouldn’t be able to launch nationwide 5G service without the merger. Dish has argued it can build a better network by starting from scratch. Even before he pursued a deal with the Justice Department, Dish Chairman Charlie Ergen said his business could invest capital more efficiently without the burden of old equipment and software holding back its ambitions. Dish hasn’t made public the prices or structure of the wireless plans it will sell. Senior FCC officials said on a call with reporters that they are confident the new carrier under Dish will be viable because the wholesale deal it has struck with the new T-Mobile is more aggressive than any other such arrangement the carrier and Sprint currently have. Its terms give Dish the financial ability to compete in the prepaid market against T-Mobile’s Metro brand, they said. The settlement also included provisions designed to make sure Dish actually builds the promised infrastructure. Among other penalties, the satellite company agreed to pay the government up to $2.2 billion if it fails to meet its network expansion requirements. Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Sarah Krouse at sarah.krouse@wsj.com </s> (Reuters) - A federal judge on Wednesday ruled against U.S. health insurer Anthem Inc’s (ANTM.N) proposed $54 billion merger with smaller rival Cigna Corp (CI.N), derailing an unprecedented effort to consolidate the country’s health insurance industry.

The U.S. Justice Department sued in July to stop Anthem’s purchase of Cigna, a deal that would have created the largest U.S. health insurer by membership, and Aetna Inc’s AET.N planned $33 billion acquisition of Humana (HUM.N).

The merger would have worsened an already highly concentrated market and is likely to raise prices, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia said while issuing the ruling against Anthem’s deal.

Last month, a different U.S. judge ruled against Aetna’s proposed deal for Humana.

Government antitrust officials argued that both deals would lead to less competition and higher prices for Americans. The acquisitions would have reduced the number of large national U.S. insurers from five to three.

Jackson had separated the Justice Department’s case into two trials. Her ruling focused only on the first one in which the Justice Department argued that the tie-up would hurt the ability of large national employers to get competitive rates for the health coverage they provide workers.

The second trial considered overlaps in the two insurers’ business selling health benefits to individuals, and administering Medicare Advantage coverage to the elderly.

Anthem argued that there was enough competition because large companies with more than 5,000 employees often used multiple smaller players in the national market, but the judge disagreed.

“Regional firms and new specialized ‘niche’ companies that lack a national network are not viable options for the vast majority of national accounts, and they will not ameliorate the anticompetitive effects of this merger,” Jackson wrote.

Cigna intends to carefully review the opinion and evaluate its options in accordance with the merger agreement, it said in a statement.

Anthem said on Thursday that it intends to promptly file a notice of appeal and request an expedited hearing of its appeal to reverse the court’s decision.

PROTECTING CONSUMERS

Acting Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division said the ruling had prevented American consumers from facing higher health insurance premiums and less innovation.

Bill Baer, who was head of the Justice Department’s antitrust division when it decided to sue to block both the insurance deals but has since left the agency, also hailed the decision. “Together with the decision on Aetna and Humana, this preserves five large national providers of critically important health insurance products,” he said.

The fifth player, UnitedHealth Group Inc. (UNH.N) was not involved in the deals.

Some Wall Street analysts expect all four of the companies to now move on, although Aetna and Humana have not committed to doing so. Their deal expires Feb. 15.

“The likelihood of success in an appeal would be very low,” said Matthew L. Cantor, a partner in the law firm of Constantine Cannon in New York. He noted points in the judge’s order about the concentrated national market, the high barrier to entry for competitors, and the companies’ roles as direct competitors.

The deals were announced at a time when former President Barack Obama’s national healthcare reform law was fully in place and the four insurers were growing in the individual insurance market it established. The insurers said new costs, from higher taxes to investments in new Obamacare products, were driving their need for scale.

That landscape is less certain now. Aetna and Humana have cut back Obamacare enrollment for 2017 after losses, and President Donald Trump and fellow Republicans are weighing a “repeal and replace” path for Obamacare.

More deals may be in the offing, JPMorgan analyst Gary Taylor said in a research note. “Given Anthem and Cigna’s pursuit of Humana in 2015, we think new potential combinations could emerge.” He does not expect shares in either Anthem or Cigna to move given that investors had expected this ruling.

Cigna is entitled to receive from Anthem a $1.85 billion break-up fee if the deal fails to win regulatory approval, according to the merger agreement. The agreement also requires Cigna to have put forth its best effort on that front.

The office building of health insurer Anthem is seen in Los Angeles, California February 5, 2015. REUTERS/Gus Ruelas

But Anthem and Cigna disagreed about the deal in court, Jackson wrote in her order, with Cigna refusing to sign off on Anthem’s interpretation of how the companies could garner savings.

Anthem is the largest member of the Blue Cross Blue Shield Association and operates BCBS plans in 14 states. It and said it could apply its discounts to Cigna members while Cigna said its collaborations with doctors would save money.

Pre-merger integration was stalled and incomplete, the judge said.
The Antitrust Division of the U.S. Justice Department files a lawsuit against two large printing companies contemplating a merger. If the deal is allowed to proceed, the filings claim, the combined company would dominate the market for printing magazines, catalogs and books.