Federal judge approves AT&T-Time Warner merger, warns stay request would be unjust
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A federal judge in Washington, D.C., has approved AT&T’s acquisition of Time Warner after concluding that the U.S. Justice Department did not prove that the $85.4 billion deal would harm consumers.
U.S. District Judge Richard Leon said Tuesday that the parties had waged “an epic battle” in a six-week trial but the media companies had prevailed in the antitrust suit, report Politico, the New York Times, the National Law Journal and the Washington Post. Leon said the Justice Department had failed to prove the deal would lead to higher costs for television and internet subscribers, or to fewer options for consumers.
Leon warned at the conclusion of his opinion issued Tuesday that it would be unjust for the government to seek a stay of the ruling pending an appeal because it would have the effect of preventing the merger before a June 21 “break-up date.” Failure to consummate the merger by that date would also require AT&T to pay a $500 million break-up fee.
“In this court’s judgment, a stay pending appeal would be a manifestly unjust outcome in this case,” he wrote. “I hope and trust that the government will have the good judgment, wisdom and courage to avoid such a manifest injustice.”
The Justice Department’s antitrust suit had pointed out that AT&T’s DirecTV is the nation’s largest distributor of traditional subscription television, and Time Warner owns many top networks, including TNT, TBS, CNN, and HBO. The Justice Department’s antitrust chief, Makan Delrahim, had suggested before filing suit that the companies sell their stake in either DirecTV or Turner Broadcasting, but the companies didn’t agree.
Both companies are in related industries—one is a telecom and the other is a media company—and they don’t produce competing products. Such deals usually win approval from federal regulators, according to the New York Times.
Its coverage says the decision “is expected to unleash a wave of takeovers in corporate America.”