Published: Wed, June 13, 2018
Markets | By Otis Pena

Federal judge approves AT&T merger with Time Warner

Federal judge approves AT&T merger with Time Warner

AT&T plans to close its purchase of Time Warner Inc no later than June 20 after a US court decided it could move ahead with the deal, the company's lead attorney said on Tuesday.

Shares of AT&T fell about 1.3 per cent in after-hours trade following the decision, while Time Warner rose more than 5 per cent. Comcast was down 3 per cent. Trump weighed in again after the justice department filed its suit: "Personally, I've always felt that that was a deal that's not good for the country". AT&T is known to most consumers as a telecom company, offering cable, internet and phone services, but this is just the latest in a line of mergers from such companies trying to break into the media landscape.

Critics charged that Trump had come out against the deal because of Time Warner's CNN, which has been highly critical of his presidency.

But AT&T failed to provide any evidence suggesting that the DOJ's prosecution of the merger had "discriminatory effect and discriminatory intent", Leon said in a ruling earlier in the trial. Bush appointee, handed down his decision approving the $85 billion merger with no conditions on Tuesday afternoon, following months of oral arguments and deliberations. The company will now work to complete the merger by June 20th.

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". "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". Disney has bid for 21st Century Fox's entertainment assets, a deal that appears to have been shaped to avoid a challenge by Delrahim's antitrust squad.

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As a candidate for president, Trump vowed to block the merger, stating it would concentrate too much power in one company. The loss is a black eye for the Justice Department.

Some critics of President Trump have questioned whether the case was brought as political payback against Time Warner's CNN for unfavorable coverage of President Trump, who often called the cable news channel "fake news". The ruling comes one day after the repeal of net neutrality, meaning that AT&T now has more freedom to prioritize the delivery of select content on its network.

The companies' main economist, Dennis Carlton from the University of Chicago, refuted Shapiro's model as overly complicated and rejected his conclusions.

The fate of the AT&T-Time Warner merger, a massive media deal opposed by the government that could shape how much consumers pay for streaming TV and movies, rests in the hands of a federal judge. That leverage would allow AT&T to raise prices for Time Warner content, with those costs being passed on to consumers, according to the Justice Department.

"The judge's sweeping rejection of the government's case doesn't surprise us at all", AT&T attorney Daniel Petrocelli told reporters outside of the courthouse shortly after the decision was issued.

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