Court Approves AT&T’s Merger With Time Warner

At&t Time Warner Stock Index

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data.

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.

In making that ruling, Leon reaffirmed the judiciary's traditional tolerance for "vertical integration" - the technical term for mergers between companies that operate related, but distinct, businesses.

In denying any attempt by the government to seek a stay of his ruling during appeal, Leon said AT&T and Time Warner "understandably fear the government will now seek to do indirectly what it couldn't accomplish directly".

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. Instead, they argued the media industry is going through a massive change as fewer people subscribe to paid TV service and instead stream content via the internet.

The judge in a scathing opinion urged the USA government not to seek a stay of his ruling, saying it would be "manifestly unjust" to do so and not likely to succeed.

"Judge OKs AT&T merger with Time Warner, rejecting government argument it would hurt pay-TV consumers, competition". "For AT&T and Time Warner, this is a major victory lap".

While this court case is decided, the U.S. Department of Justice could appeal the ruling.

"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 court has spoken", U.S. District Judge Richard Leon said.

Initially AT&T and Time Warner planned to use a "selective enforcement" defense, alleging that the administration was blocking the deal because of Trump's dislike of CNN.

If the deal is approved, it will trigger a bidding war between Comcast and Disney for Fox assets, Napolitano said. Stephenson said Watch would only be possible if the merger went through.

The DOJ has argued that this type of consolidation would give the merged AT&T-Time Warner the ability to raise prices, thwarting the competition's ability to compete by forcing them to raise prices to maintain carriage rights.

Time Warner owns CNN, HBO, Warner Bros. 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. But AT&T CEO Randall Stephenson remained at the company's headquarters in Dallas, and he learned of the ruling when AT&T general counsel David McAtee called him, a spokesperson said.

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. And Leon's decision is likely to trigger a wave of new mergers, as many executives were waiting to for the outcome of AT&T's bid before pushing forward with their desired deals.

Democrats on Capitol Hill have raised questions about the Justice Department's motivations and the White House's influence in deciding to take the case to court.

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