Court Approves AT&T’s Merger With Time Warner

Court Approves AT&T’s Merger With Time Warner

A U.S. federal judge approved AT&T's US$85 billion (NZ$121 billion) purchase of Time Warner on Tuesday, handing the telecom giant a massive victory that could clip the ambitions of USA regulators seeking to block big corporate tie-ups. "In the meantime, not only may consumers be harmed directly by the anticompetitive harms that this merger will cause, such as higher bills and fewer choices of programming and provider, but also by the many other mergers it will encourage". The transaction will close on or before June 20, AT&T's lead lawyer, Daniel Petrocelli, told reporters after the ruling.

Even so, the case brought previous year by the antitrust lawyers at Trump's Justice Department to block the AT&T and Time Warner marriage is an outlier.

AT&T and Time Warner Inc. announced their proposed merger in October 2016.

Justice Department attorneys argued in a six-week trial in a windowless Washington courtroom earlier this year that AT&T could use its control over popular Time Warner cable channels such HBO, TNT and CNN to slow the growth of popular streaming services and hike bills for cable-TV customers.

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.

"We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner", he said in the 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.

To see how this could happen, consider that, after the merger, AT&T would have the rights to all of HBO's output, CNN, live National Basketball Association and NCAA broadcasts, and many more desirable Time Warner properties. AT&T argued that it needed to complete the merger to compete against media behemoths like Netflix and Amazon.

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"This will be a blockbuster summer for media mergers", said Mary Ann Halford, senior adviser to OC&C Strategy Consultants.

In seeking to unify, the two companies argued that a new crop of competitors cast an ominous shadow over their businesses: Netflix, Amazon and Apple in content and distribution; Google and Facebook in advertising.

According to CNBC, U.S. District Court Judge Richard J. Leon didn't impose any conditions in the closely watched case.

"We are grateful to the court for seeing it the way we did", Gindseberg said.

A ruling for AT&T and Time Warner would not only give the green light for the merger, but it could unleash a flurry of other deals. Meanwhile, shares of wireless carrier Sprint was rallying as much as 5% following the ruling amid speculation that a merger with rival T-Mobile was now more likely.

Outside of court, however, critics of the lawsuit pointed to Trump's frequent criticism of CNN, which is owned by Time Warner.

A Comcast-Fox deal would be another vertical merger, like the AT&T-Time Warner deal.

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

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