Judge clears AT&T takeover of Time Warner

Judge clears AT&T takeover of Time Warner

Instead, a rush to consolidate is likely.

'Regardless of what happens on the appeal front, expect Comcast to put forth an all-cash bid in the next day or so at a premium to Disney, ' said Mary Ann Halford, senior adviser to OCC Strategy Consultants.

United States district judge Richard Leon dismissed the antitrust case brought by the justice department last November, the culmination of a 20-month ordeal that has seen the deal attacked by Donald Trump, critics of media consolidation and consumer groups.

In a ruling Tuesday, a federal judge cleared AT&T's path toward becoming a major player in entertainment and shut down the government's attempt to block the legacy telecom's merger with Time Warner. 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.

AT&T argued that the merger will help customers without harming AT&T's business rivals, and that the combined company wouldn't have enough market power to raise antitrust concerns. If it's not wrapped up by then, either company could walk away, and AT&T would have to pay a $500 million breakup fee. In addition, T-Mobile and Sprint are direct competitors, so their merger is perhaps more likely to be seen as anti-competitive than a union of AT&T and Time Warner.

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. Comcast has promised to top that.

"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", McAtee said in a statement. Judge Richard Leon ruled the deal is legal and he did not impose any conditions on the merger.

Two other vertical deals under review are Cigna Corp's plan to buy Express Scripts Holding Co for $52 billion (38.8 billion pounds) and CVS Health Corp's planned merger with Aetna Inc for $69 billion (51.5 billion pounds).

After almost two years, AT&T is on the cusp of completing its acquisition of Time Warner, a deal it struck in a bid to become an entertainment giant that can feed Time Warner programming like HBO and CNN to its 119 million mobile, internet and video customers.

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 did not immediately respond to a request for comment.

Time Warner gained as much as 5.8 percent in after-hours trading, while AT&T fell as much as 3.9 percent.

Still, at least one company, Comcast, the largest US cable provider, had been waiting for the court decision before making any large M&A moves in media, sources have said.

Leon said the government failed to prove that the merger would lead to higher prices and other ham to consumers.

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