US Court Approves $85Bln AT&T Merger With CNN Owner Time Warner

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A United States 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.

A U.S. judge today cleared the AT&T merger with Time Warner. The Justice Department can still appeal Leon's decision. The deal will unite Time Warner's TV shows and movies with AT&T's enormous distribution system, including cell phone and satellite networks.

Leaving the courtroom, Makan Delrahim, head of the Justice department's antitrust division, said that he would read the judge's opinion before making a decision on an appeal.

AT&T applauded the decision in a statement. Their offer doesn't include HBO, however, which is one reason why the Justice Department says it isn't a fix at all. He cited the size of the combined companies.

AT&T argued that it needed to complete the merger to compete against media behemoths like Netflix and Amazon.

The Department of Justice had sued to stop the merger, contending that such a merger would place much power in the hands of one corporation.

The judge didn't buy that. But he signed off on the deal with no conditions and knocked down the government's contentions point by point.

The ruling comes with other big mergers awaiting review.

Delrahim said the government was disappointed in the ruling and would "consider next steps".

Gary Ginsberg, executive Vice President of Time Warner, said that they were happy with the decision.

"The case stands as a testament to the wisdom of this combination of these two great companies and how it will benefit consumers for generations to come", he told reporters.

"Common sense tells you that this degree of concentrated power isn't right", wrote Zephyr Teachout, a candidate for attorney general of NY, wrote immediately following the judge's ruling.

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.

Shares in entertainment companies and potential targets of new deals because of Leon's decision rose sharply - CBS shot up about 5 percent and Fox jumped 7 percent in after-market trading on hopes of a bidding war for it between Comcast and Disney. And he predicted that the ruling would lead to still more consolidation. "The question is whether Disney is ready".

A Comcast had no comment on Tuesday night.

"It's open season for vertical mergers", said Chris Sagers, an antitrust law professor at the Cleveland-Marshall College of Law. It would also be the 12th largest deal in any sector, the data showed. The new bid from Comcast is expected to be made within the next 24 to 48 hours, potentially spelling trouble for the Mouse House.

The court's approval to merge with Time Warner clears the way for AT&T to launch their new $15 AT&T Watch streaming service. John Stankey will become the executive in charge of the assets, succeeding Bewkes. "For AT&T and Time Warner, this is a major victory lap". That same day, Trump, then a candidate for president, pledged that his administration would block the deal.

A federal judge on Tuesday gave a ringing endorsement to AT&T Inc's planned acquisition of Time Warner Inc 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.

Gene Kimmelman, a former DOJ antitrust official who now leads the consumer advocacy group Public Knowledge, told the Washington Post that if the government lost the case, "they'll face an avalanche of new transactions".

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