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US Court Approves $85Bln AT&T Merger With CNN Owner Time Warner

US Court Approves $85Bln AT&T Merger With CNN Owner Time Warner

David McAtee, AT&T general counsel, said: "We are pleased that, after conducting a full and fair trial on the merits, the court has categorically rejected the government's lawsuit to block our merger with Time Warner".

The ruling brings to an end a six-week antitrust trial which heard regulators argue that the deal, worth $85m (£63.5m), would give AT&T undue leverage against rivals that rely on Time Warner content. The Justice Department can still appeal Leon's decision.

"All I know is that this will be a blockbuster summer for media mergers".

Delrahim said the Justice Department remains committed to preserving competition for the benefit of consumers and is reviewing its options.

U.S. District Judge Richard J. Leon issued a 172-page opinion Tuesday, saying the government did not meet its burden of proof.

To AT&T, however, goes the grand prize: a premier piece of the entertainment world.

That means AT&T would control rights to entertainment properties like "Game of Thrones", "Lord of the Rings", the LEGO movies, as well as live sports like the National Basketball Association and March Madness. Beyond its wireless network and internet service, AT&T acquired DirecTV in a $67 billion deal in 2015, which also had the blessings of government regulators.

AT&T said it needed Time Warner to survive in a rapidly changing media landscape, especially to compete against giants like Netflix and Amazon.

The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers - who spend more time watching video on phones and tablets and less time on traditional live TV on a big screen. Looming in the background of the deal has been Trump's long-running feud with Time Warner's CNN, which he has often derided as "failing" and a purveyor of "fake news". AT&T's stock was down about 2 percent.

Twenty-First Century Fox jumped 7 percent in extended trade after the ruling on expectations that Comcast and Walt Disney Co could start a bidding war to acquire its media assets.

"Everyone's looking at here what happens in entertainment", said Gene Kimmelman, the president of Public Knowledge. "You've got the courts flashing a green light".

Leon's ruling could shape the government's future competition policy.

But Michael Copps, a former member of the Federal Communications Commission and an adviser to the left-leaning political group Common Cause, was dismayed. Now they can do the same on broadband. The Justice Department's antitrust chief, Makan Delrahim, said he was disappointed and will consider his next steps.

Executives at both companies broach the idea that the merger was singled out for antitrust enforcement because of President Donald Trump's animosity toward Time Warner unit CNN. AT&T did not immediately respond to a request for comment.

After the decision, Mr Petrocelli said: "We were surprised when the case was brought and as I said in closing arguments, it's a case that never should have been brought".

However, the Federal Court rejected those arguments and approved the deal without conditions. Another federal antitrust agency steered clear of a formal probe of Amazon.com, for example, when the e-commerce giant sought to buy national grocery chain Whole Foods in 2017.

Other analysts maintained that because it is a "vertical" tie-up of two companies without overlapping operations, it should pass muster based on legal precedent for the past three decades.

Among them is T-Mobile US, which is waiting for a government decision on their proposed merger with Sprint Corp.

These firms have argued since announcing the deal in April that the only way they can build out the next generation of wireless networks, and keep the industry competitive, is if they combine forces.

To assuage the Trump administration's criticisms, AT&T offered to submit pricing disagreements with other pay TV companies over Turner's channels to third-party arbitration. "It will allow T-Mobile to compete in spaces or sectors that they really haven't done so today".

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