Judge approves AT&T-Time Warner merger without conditions

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

In the lawsuit brought forward by the Department of Justice, Judge Richard Leon sided against the government's claims that the $85.4-billion deal between the two companies would violate antitrust laws and unfairly lead to higher prices for consumers.

Leon also said it would be harmful for him to put a temporary stay on the merger while the government appeals his decision, if it does so.

AT&T said it intends to close the merger by June 20.

The decision means the telecom giant will now control highly sought after programming - including Game of Thrones, the Harry Potter movie franchise, and CNN - as well as the infrastructure that delivers that content to tens of millions of living rooms televisions and smartphones. Had Leon ruled in favor of the government, the consequences would have reached far beyond media, to tech, health care, finance and other major fields.

AT&T-Time Warner is considered a vertical merger, as AT&T is a content distributor and Time Warner is a content creator. The merger unites one of the nation's largest telecom providers with a media giant. The Justice Department "did a good job just focusing on this merger. and how it would be abusive, not just how bad".

Other media stocks that saw big price moves after the judge's ruling was announced included 21 Century Fox (FOX), whose shares were up almost 5 percent on speculation it could be the subject of a bidding war between Disney (DIS), which already has a $52 billion all-stock deal for Fox on the table, and a media giant like Comcast (CMCSA), which in recent weeks has been hinting of its intention to make an even larger all-cash bid for Fox.

The two then had a long lunch in the Time Warner dining room in NY and agreed that their industries were under siege.

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The judge's decision, which is allowing AT&T to merge with Time Warner without conditions, shows the federal government may struggle to rein in such mergers.

AT&T has said it needs to buy Time Warner to compete with the likes of Amazon, Netflix and Google in the shape-shifting streaming-TV environment.

Get ready for more deal-making.

During a six-week trial in March and April, the Justice Department argued that the proposed merger needed to be blocked because it would give AT&T too much leverage over competitors in the on-demand and streaming video market. Other deals on the line include the proposed T-Mobile and Sprint merger, CVS' purchase of Aetna and Cigna's acquisition of Express Scripts.

If AT&T is successful in its bid to buy Time Warner, it will nearly certainly find itself competing in a media market dominated by other large, integrated providers. Stephenson was relieved. So was outgoing Time Warner CEO Jeff Bewkes, who also learned the news from a phone call. Some suspected, however, that the real motivation behind the DOJ's case may be personal and political agenda of Donald Trump himself: He sees CNN as his political nemesis, and CNN is owned by Time Warner.

"Judge OKs AT&T merger with Time Warner, rejecting government argument it would hurt pay-TV consumers, competition".

The White House did not immediately respond to a request for comment. "Together, AT&T and Time Warner concluded that both companies could stop "chasing taillights" and catch up with the competition".

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