Federal Judge Approves AT&T Time Warner Merger

AT&T-Time Warner Decision: Either Way, Media Is Ailing

AT&T-Time Warner Decision: Either Way, Media Is Ailing

The $85 billion merger of AT& and was cleared by a federal judge in Washington, D.C., today in a landmark antitrust ruling that went against the USA government's Department of Justice. The judge put no conditions on the deal. Disney has a deal to buy the bulk of Fox, but Comcast is now expected to make a counterbid, especially with the favorable ruling for AT&T.

The merger's approval was a stinging defeat for the Justice Department, which could move to appeal Leon's ruling.

The Justice Department argued that the merger between AT&T and Time Warner would introduce unfair advantages in the marketplace.

Prior to the news on the decision in the case, AT&T stock closed up 0.5% (to $34.50 per share) and Time Warner closed up 0.05% in regular trading (to $96.22 per share) which concluded at 4 p.m. ET. Comcast, for example, would like to outbid the Walt Disney Co. for some of 21st Century Fox's assets, but has held off until the trial ended.

The fate of the AT&T-Time Warner merger, a massive media deal opposed by the government that could shape how much consumers pay for streaming TV and movies, rests in the hands of a federal judge.

The U.S. Department of Justice has lost its antitrust lawsuit to bar the planned AT&T and Time Warner merger, according to Business Insider.

Some see the decision to challenge the merger as political, something the Justice Department has fiercely denied.

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Judge Richard Leon said the U.S. government failed to meet the burden of proof that the tie up between the largest United States pay TV operator and media entertainment giant Time Warner would harm competition. He said AT&T plans to close the deal on or before June 20.

AT&T and Time Warner said they need to combine in order to better compete with Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOG), companies that are already powerhouses in the content game.

The merger would create a media and telecommunications powerhouse, reshaping the landscape of those industries.

Trump's frequent attacks on CNN led to much speculation, including from AT&T Chairman and CEO Randall Stephenson, that the president's opposition stemmed from anger over the network's coverage rather than concern over greater corporate consolidation.

Some critics of President Trump have questioned whether the case was brought as political payback against Time Warner's CNN for unfavorable coverage of President Trump, who often called the cable news channel "fake news".

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner", said David McAtee, AT&T General Counsel. Announced in October 2016, it was seized on by then presidential candidate Donald Trump as the sort pf deal his administration would block.

The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers.

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