A federal judge has approved AT&T’s merger with Time Warner. He rejected the government’s argument that it would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.
The move deals a blow to U.S. President Donald Trump’s administration which tried to block the deal and likely set off a wave of corporate mergers.
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U.S. District Judge Richard Leon announced the decision Tuesday, bringing the biggest antitrust trial in years to an end. The ruling blesses the USD$85 billion merger, one of the biggest media deals ever. It allows AT&T, a phone and pay-TV giant, to absorb the owner of CNN, HBO, the Warner Bros. movie studio, “Game of Thrones,” coveted sports programming and other “must-see” shows.
The Department of Justice could decide to appeal the verdict. AT&T did not immediately respond to a request for comment.
Now that the merger has been approved, other companies are likely to rush to consolidate.
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Tuesday’s ruling signaled that federal regulators will have a hard time stopping companies from getting bigger by gobbling up rivals and the programming they own. Even if a company doesn’t need to get bigger right away, it might need to do so to prevent a competitor from overshadowing it.
For starters, expect Comcast to make a bid for Fox’s entertainment business as early as Wednesday. Disney has made a $52.4 billion all-stock offer for the bulk of Twenty-First Century Fox, including the studios behind the “Avatar” movies, “The Simpsons” and “Modern Family.” Comcast has promised to top that. AT&T’s favourable ruling would seem to clear any regulatory hesitation.
U.S. District Judge Richard Leon said the government failed to meet its burden of proof in its antitrust suit against the AT&T-Time Warner merger.
Leon said the government had “taken its best shot” to oppose the merger. But, he added, “the government’s evidence is too thin a reed for this court to rely on.”
The judge made his remarks to a packed courtroom in an unusual session weeks after the trial ended.
Leon also said it would be harmful for him to put a temporary stay on the merger while the government appeals his decision, if it does so. The “drop dead” deadline for the merger to be completed is June 21. If not completed by then, either company could walk away, and AT&T would have to pay a $500 million breakup fee.