Published: Wed, June 13, 2018
Markets | By Erika Turner

AT&T Wins in Court to Merge With Time Warner

AT&T Wins in Court to Merge With Time Warner

A U.S. federal judge on Tuesday cleared the mega merger between AT&T and Time Warner in an antitrust case with potential far-reaching implications.

Leon's opinion may also increase the chances that other deals already reached, like CVS' bid for Aetna and T-Mobile's proposed merger with Sprint, will survive regulatory scrutiny. The Justice Department even sued to block it, but Judge Leon saw things a bit differently.

Regulators will still likely scrutinize similar deals, and there is no guarantee that the district court's approval of AT&T's merger with Time Warner means that other major media acquisitions would be approved, several antitrust attorneys told Reuters.

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.

The biggest impact of this deal will be felt quickly, as Comcast will now formally make an offer to Fox for the majority of its assets.

Some thought Trump had pressed for the lawsuit because of his animus toward Time Warner's CNN. And the company said it plans to close the merger, which was announced a year and a half ago, on or before June 20.

Time Warner gained as much as 5.8 percent in after-hours trading, while AT&T fell as much as 3.9 percent.

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The addition of South Asian rivals India and Pakistan have also raised questions about the group's long-term cohesiveness. Xi emphasized that the U.S. seeks to change the global order through unilateral approaches and violation of regulations.

In a blow to the Justice Department, AT&T's planned acquisition of Time Warner Inc received a nod from a federal judge on Tuesday without any conditions, opening the door for companies such as Comcast Corp, and Verizon Communications Inc to pursue deals to buy creators of media content. He warned the Justice Department not to seek a stay on the deal, saying that would be "a manifestly unjust outcome".

AT&T argued that the merger will help customers without harming AT&T's business rivals, and that the combined company wouldn't have enough market power to raise antitrust concerns.

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.

The merger would create a media and telecommunications powerhouse, reshaping the landscape of those industries. And in order to stay competitive, AT&T's CEO Randall Stephenson said during the trial that it needed a big deal to survive.

AT&T, which has invested heavily in a streaming video service called DirecTV Now, is free to bulk up its original programming with Time Warner content. Trump had pledged to block the deal when he was campaigning for president.

"We are disappointed that the court missed an opportunity to rein in the First Amendment-crushing mass media consolidation trend, which puts too much media power in the hands of too few", Manning said in a statement.

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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