US judge clears AT&T merger with Time Warner

Irene MckinneyJun 14, 2018

AT&T and Time Warner argue they're simply trying to stay afloat in the new streaming environment.

It said that it would go to court and fight if the Justice Department tried to block the deal.

"If pro forma AT&T were a country, it would place 32nd on the list of highest total debt burdens, between Indonesia and the UAE", Nathanson wrote in a research note.

The court's decision in the case could have an enormous impact on the media landscape and the fate of future corporate mega-mergers. "For recognizing this case was meritless political and should never have been brought in the first place". He cited the size of the combined companies.

A combination photo shows the Time Warner shares price at the New York Stock Exchange and AT&T logo in New York, NY, U.S., on November 15, 2017 and on October 23, 2016 respectively.

The judge indicated during the trial that he wasn't buying Shapiro's projection. But, he added, "the government's evidence is too thin a reed for this court to rely on". But Leon took the unusual step of urging the government to avoid asking for an injunction that could prevent the merger from occurring while any appeal is pending.

"We are disappointed in the ruling", Assistant Attorney General Makan Delrahim said in a statement shortly after the ruling.

For months AT&T efforts to merge with Time Warner have been held up by the Department of Justice efforts to block the merger.

AT&T in a six-week trial argued that the purchase of Time Warner would allow it to gain information about viewers needed to target digital advertising, much like Facebook Inc and Google already do. Comcast's official counterproposal now pressures Disney to come up with a higher offer for Fox - lest it have compelling entertainment assets slip through its hands at a time when technology giants are storming Hollywood, forcing traditional media companies to bulk up. Read on to find out what people on the Internet are saying about Comcast topping Disney's bid for Fox.

"We see FOXA as a clear victor following today's ruling", John Janedis, an analyst at Jefferies, told clients in a note Tuesday. "The question is whether Disney is ready".

A Comcast had no comment on Tuesday night.

The larger business world was also watching Tuesday's announcement very closely.

Gerzof Richard said he believes the merger will lead to greater diversity in programming and in how the programming is delivered to homes and devices. That was "a deal we will not approve in my administration".

Some of AT&T's top executives traveled to Washington for the announcement.

"Compare today to the 50s or 60s when we had three television stations and you had one AT&T that was, then, protected by government monopoly", Crews said. Stephenson was relieved. So was outgoing Time Warner CEO Jeff Bewkes, who also learned the news from a phone call. The Justice Department could decide to appeal the ruling, however.

Shares of AT&T were about flat in after-hours trade following the decision, while Time Warner rose more than 5 percent.

The Justice Department sued to block AT&T/Time Warner deal in late 2017 as anti-competitive and harmful to consumers.

Critics pointed out that the deal wouldn't be the end of such massive mergers, and may in fact open the doors to similar acquisitions among other companies. But Leon blocked discovery on certain White House communications that AT&T and Time Warner were seeking, and the companies dropped that defense, choosing to litigate the case on pure antitrust grounds.

- CNN's David Goldman contributed reporting.

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