Judge allows AT&T and Time Warner to merge

Govt argues that AT&T-Time Warner deal would hurt consumers

Federal Judge to Decide if AT&T Can Buy Time Warner The Associated Press 11 Jun 2018

A federal judge on Tuesday approved the blockbuster merger between AT&T and Time Warner, rebuffing the government's effort to block the $85.4 billion (U.S.) deal, in a decision that is expected to unleash a wave of takeovers in corporate America.

"The impact from this decision will have wide reaching ramifications across the telecommunications, media, and tech industry for decades to come", said GBH Insights analyst Dan Ives.

And that could be enough to rock the deal off its foundation, sources said, as the AT&T merger agreement expires on June 21 and Time Warner could ask for more money - or seek a different suitor, sources said.

The government can appeal the ruling, but Leon reportedly said that he would reject any government motion for a stay that would further delay the deal. 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. The combined company would have a library that includes HBO's hit Game of Thrones and channels like CNN, along with vast distribution reach through wireless and satellite television services across the country.

Leon said the government had "taken its best shot" to oppose the merger.

If Judge Leon approves the deal, it is expected to close before the end of the month.

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AT&T said that controlling Time Warner's cable brands will help it craft new types of content to retain its customers as web-based rivals like Netflix Inc woo audiences away from traditional pay-TV subscriptions.

"AT&T is buying Time Warner, and thus CNN", Trump said at a campaign rally in 2016. 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. The loss is a black eye for the Justice Department. A loss for AT&T and Time Warner could have signaled a new era of government scrutiny over so-called "vertical mergers" and could have halted attempts by companies like Disney, Fox and Comcast to announce their own megadeals.

"We are disappointed that the court missed an opportunity to rein in the First Amendment-crushing mass media consolidation trend, which puts too much media power in the hands of too few", Manning said in a statement.

The government's case hinged on an economic model produced by Carl Shapiro, an economist at the University of California at Berkeley, who predicted an annual price increase to consumers of at least $285 million.

Americans for Limited Government President Rick Manning said the decision was regrettable.

The judge rejected the government's argument that the merger would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies. 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.

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