Top of the Morning
The U.S. Department of Justice yesterday filed suit to block AT&T's proposed $85 billion takeover of Time Warner, claiming that the deal would increase prices for consumers and decrease competition in the streaming video market.
- Why it's the BFD: Because big tech companies like Facebook, Netflix and Google — which provide both media content and distribution at a scale that dwarfs a merged ATT/TW — should be absolutely petrified. DoJ may officially be suing a legacy telco, but its complaint is doubling as a Trojan Horse at the gates of Silicon Valley.
- Also: (1) The suit should effectively freeze 21st Century Fox's attempts to sell most of its assets to suitors like Disney and Verizon. (2) Past comments can come back to haunt you: Trump's campaign statements and anti-CNN screeds, DirecTV's conditional concerns about Comcast/NBCUniversal and DoJ antitrust head Makan Delrahim's positive disposition toward ATT/TW.
- Bottom line: "If DoJ loses the case, it could spur a flood of consolidation. If it wins, it could set a new precedent that changes the conventional wisdom about the competitive impact of vertical mergers." - Kim Hart, Axios
Venture Capital Deals
• TuSimple, a Chinese maker of autonomous truck software company backed by Nvidia, has raised $55 million in Series C funding. Fuhe Capital led, and was joined by existing shareholders Sina Corp. and Zhiping Capital. http://axios.link/0TSF
• Locus Robotics, a Wilmington, Mass.-based developer of autonomous mobile robots for use in e-commerce fulfillment warehouses, has raised $25 million in Series B funding led by Scale Venture Partners. http://axios.link/satY
• Pixvana, a Seattle-based mixed reality production platform, has raised $14 million in Series A funding. Vulcan Capital led, and was joined by Raine Ventures, Microsoft Ventures, Cisco Investments, Hearst Ventures and return backer Madrona Venture Group. http://axios.link/wb3p
• Peanut, a London-based community app for new mothers, has raised. Sweet Capital Investments and Female Founders Fund co-led, and were joined by Greycroft Partners, Sound Ventures, NEA, Felix and Partech International. http://axios.link/s9sU
Private Equity Deals
🍣 Bain Capital plans to divest its remaining 19.8% stake in Japanese restaurant chain Skylark (Tokyo: 3197) via a $562 million block trade. http://axios.link/K3xW
We created this chart yesterday morning, when Tencent became Asia's first $500 billion company — and was approaching Facebook's market cap. Today, Tencent's market cap surpassed that of Facebook.
- Data: Tencent shares are up nearly 127% in 2017, and more than 11,000% since its 2004 IPO.