On Tuesday, Judge Leon ruled that the Trump administration could not block the deal. The companies then entered into discussions with the DOJ previous year and rumors surfaced that the agency had suggested some divestitures in order for AT&T to avoid an antitrust lawsuit.
A federal judge has approved AT&T's merger with Time Warner, a massive media deal opposed by the government that will shape how much consumers pay for streaming TV and movies.
The case has drawn attention from all sides including Sling TV's President Warren Schlichting, who testified against the merger.
U.S. District Court Judge Richard Leon made his decision in front of a packed house of people who were awaiting the crucially important ruling. "It would be a lose/lose for us, and a win/win for them".
Prior to the news on the decision in the case, AT&T stock closed up 0.5% (to $34.50 per share) and Time Warner closed up 0.05% in regular trading (to $96.22 per share) which concluded at 4 p.m. ET. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers.
Leon said the evidence and testimony provided by the government were faulty and that it never proved the merged entity would have increased leverage over its competitors. It is expected to appeal and ask for a stay - a delay that could stop the deal from closing for four to six months while an appellate court ponders a decision, legal experts said. The government failed to prove that the merger would dampen competition and innovation and raise prices for pay TV, said Daniel Petrocelli, the companies' lead attorney in defending the merger. Time Warner owns HBO, Warner Bros., and Turner Broadcasting System.
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USA 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. The combination would push technology forward and give consumers more choices, AT&T has promised.
The mega-merger was a high-stakes bet by AT&T Inc. on combining a company that produces news and entertainment with one that funnels it to consumers.
AT&T said it intends to close the merger by June 20. President Donald Trump, while still a candidate, said he would block the deal "because it's too much concentration of power in the hands of too few".
AT&T, which has invested heavily in a streaming video service called DirecTV Now, is free to bulk up its original programming with Time Warner content. And in order to stay competitive, AT&T's CEO Randall Stephenson said during the trial that it needed a big deal to survive.
"This is a disappointing result, and we expect the government will appeal", Public Knowledge Senior Counsel John Bergmayer said. AT&T wasn't on board, saying, "Divestitures here would destroy the very consumer value this merger is created to unlock".