AT&T to close Time Warner purchase by June 20: attorney

Ruling Expected Soon In AT&T/Time-Warner Merger Case

Ruling Expected Soon In AT&T/Time-Warner Merger Case

Court allows AT&T purchase of Time Warner A federal judge on Tuesday approved AT&T's $85 billion purchase of Time Warner.

The Justice Department, which may still appeal the decision, sued the companies in November, arguing that the tie-up could be used to suppress competition and raise prices for consumers.

Judge Richard Leon rejected those arguments, approving the deal without conditions.

When the trial ended, Judge Leon suggested the parties consider some remedies both could deal with depending on how he ruled.

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.

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.

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

Ruling Expected Soon In AT&T/Time-Warner Merger Case

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. A clear win for AT&T will embolden Comcast, the US's largest cable company, to top Walt Disney's $52bn bid for 21st Century Fox, the media empire controlled by Rupert Murdoch and his family. It could also threaten to withhold content from Time Warner channels, such as CNN, HBO or TNT, from rival services in order to gain a competitive advantage for AT&T's TV services. He warned the Justice Department not to seek a stay on the deal, saying that would be "a manifestly unjust outcome".

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

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

Judge Richard Leon said the USA 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 company will now work to complete the merger by June 20th.

It also appointed a new chief executive officer earlier this month, Hans Vestberg, the company's chief technology officer, in a move that signaled Verizon would likely double down on its existing telecommunications business.

Trump's frequent attacks on CNN led to much speculation, including from AT&T Chairman and CEO Randall Stephenson, that the president's opposition stemmed from anger over the network's coverage rather than concern over greater corporate consolidation. Trump had pledged to block the deal when he was campaigning for president.

With control over a significant portion of the content, AT&T is now in a good place to keep prices high among rivals and prevent streaming TV services from offering cut-price cable alternatives. AT&T wasn't on board, saying, "Divestitures here would destroy the very consumer value this merger is created to unlock".

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