A US court has given green signal to AT&T Inc’s bid to acquire Time Warner for $85 billion – a win for AT&T against Donald Trump’s administration that had tried to block the deal.
The deal between AT&T and Time Warner could close as early as next week. The acquisition is being seen as a turning point for a media industry that has been upended by companies like Netflix Inc and Alphabet Inc’s Google which produce content and sell it online directly to consumers, without requiring a pricey cable subscription. Cable, satellite and wireless carriers all see buying content companies as a way to add revenue.
Trump, a frequent detractor of Time Warner’s CNN and its coverage, denounced the deal when it was announced in October 2016. US District Judge Richard Leon found little to support the government’s arguments that the deal would harm consumers, calling one position “gossamer thin” and another “poppycock.”
The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast Corp’s bid for some Twenty-First Century Fox Inc assets potentially the first out of the gate.
The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. It would also be the 12th largest deal in any sector, the data showed.
In a scathing opinion, Leon concluded that the government had failed to show competitive harm and urged the U.S. government not to seek a stay of his ruling pending a potential appeal, saying it would be “manifestly unjust” to do so and not likely to succeed.
The Justice Department filed a lawsuit to stop the deal in November 2017, saying that AT&T’s ownership of both DirecTV and Time Warner would give AT&T unfair leverage against rival cable providers that relied on Time Warner’s content, such as CNN and HBO’s “Game of Thrones.”