Judge approves $85 billion AT&T-Time Warner deal

Judge approves $85 billion AT&T-Time Warner deal

Judge approves $85 billion AT&T-Time Warner deal

The media world has been holding their breath for weeks, awaiting the final decision from Judge Richard Leon as to whether or not he would allow for the two companies to merge in a deal valued at more than $80 billion. The Trump Justice Department sued to block the $85 billion merger, arguing that it would hurt competition in pay TV and cost consumers more to stream TV and movies. The judge put no conditions on the deal. The ruling comes one day after the repeal of net neutrality, meaning that AT&T now has more freedom to prioritize the delivery of select content on its network.

The ruling is also a major blow to Donald Trump's Justice Department.

The government argued that AT&T would gain outsize market power, jacking up the prices it charges cable providers to carry networks in the Time Warner stable.

In after-market trading following the ruling, shares of Time Warner rose almost 5 percent and AT&T shares fell 1.6 percent.

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Waiting in the wings are potential big-billions deals involving 21st Century Fox and Disney, Verizon and CBS, T-Mobile and Sprint. 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".

Some see the decision to challenge the merger as political, something the Justice Department has fiercely denied.

U.S. 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 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. The company will now work to complete the merger by June 20th. A loss for AT&T and Time Warner could have signaled a new era of government scrutiny over so-called "vertical mergers" and could have halted attempts by companies like Disney, Fox and Comcast to announce their own megadeals.

AT&T and Time Warner said they need to combine in order to better compete with Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOG), companies that are already powerhouses in the content game.

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The case was closely watched by telecom and media industry analysts, corporate executives, and Wall Street.

Some critics of President Trump have questioned whether the case was brought as political payback against Time Warner's CNN for unfavorable coverage of President Trump, who often called the cable news channel "fake news". It is, he said then, "a deal we will not approve in my administration because it's too much concentration of power in hands of too few".

Bloomberg via Getty Images AT&T CEO and Chairman Randall Stephenson exits federal court in April.

"We are disappointed with the Court's decision today", a spokesperson for the agency said in a statement. AT&T wasn't on board, saying, "Divestitures here would destroy the very consumer value this merger is created to unlock".

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