Judge Approves AT&T-Time Warner Merger
U.S. District Court Judge Richard Leon has approved AT&T's proposed $85 billion purchase of Time Warner, a corporate combination that promises to unleash even more megamergers in the fast-changing media business.
The judge's opinion permits the merger to go forward with no conditions, according to CNBC and Reuters. The Trump administration had opposed the merger, which promises to join one of the country's biggest telecom providers with a media giant.
Beyond the impact on the companies, the merger is expected to spur frantic dealmaking in the rapidly consolidating media sector. Consumers, too, eagerly watched, with people lined up on Monday outside the Washington courtroom in hopes of getting a seat, Bloomberg reported.
Leon previously approved Comcast's acquisition of NBCU in 2011. In that case, he added a list of conditions the new entity was required to follow. Among those, Comcast agreed not to gouge competitors who wanted to carry NBC content and not to create a service entirely made up of Comcast or NBC content.
The Justice Department had pressured Time Warner to sell Turner Broadcasting, which includes the cable news operation CNN, or other segments of the business -- suggestions the companies resisted. They've now won that bet. Time Warner shares were up nearly 5 percent in after-hours trading.
Other media stocks that saw big price moves after the judge's ruling was announced included Twenty-First Century Fox, whose shares were up nearly 5% on speculation it could be the subject of a bidding war between Disney, which already has a $50 billion deal for Fox on the table, and a media giant like Comcast, which in recent weeks has been hinting of its interest in Fox.
Assistant Attorney General Makan Delrahim said in a statement the DOJ was "disappointed with the Court's decision today. 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. We will closely review the Court's opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers."