Judge clears AT&T takeover of Time Warner

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"We are pleased that, after conducting a full and fair trial of the merits, the court has categorically rejected the government's lawsuit to block our merger with Time Warner", AT&T's general counsel David McAtee said in a statement.

"This decision from Judge Leon will have broad ramifications for the tech, telecommunications and media sector for decades to come", said Daniel Ives, the chief strategy officer at GBH Insights.

In court the justice department argued an integrated company would use its size to raise prices and that it was problematic for one company to own a top pay-TV distributor, AT&T's DirecTV, as well as Time Warner, a company that makes content distributed by DirecTV's rivals.

Already one deal depends on the ruling: Comcast Corp said in May that it was preparing a higher, all-cash offer for most of the media assets of Twenty-First Century Fox, but sources say it will only proceed if AT&T wins its case.

If AT&T wins, the Justice Department may rethink whether to sue to stop other deals where a company buys a supplier, known as a "vertical merger". He noted that Time Warner owned CNN, and then declared his opposition to the $85 billion proposed sale.

"The government here has taken its best shot to oppose this merger", Leon said, speaking to a packed courtroom in an unusual session weeks after the trial ended. The judge put no conditions on the deal. The "drop dead" deadline for the merger to be completed is June 21.

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BREAKING: AT&T, Time Warner Merger Cleared

It is worth remembering that the Justice Department is reviewing the T-Mobile/Sprint combination, and the Justice Department did not approve AT&T's purchase of Time Warner. "We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner".

Trump's frequent attacks on CNN led to much speculation, including from AT&T Chairman and CEO Randall Stephenson, that the president's opposition stemmed from anger over the network's coverage rather than concern over greater corporate consolidation.

The Justice Department had repeatedly suggested the judge consider forcing AT&T to divest some of Time Warner's cable channels.

For cable companies feeling the pain of cord-cutting, similar deals for coveted media brands could help them build out new content offerings and offset expected declines in revenues, analysts and dealmakers told Reuters. 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".

The companies' main economist, Dennis Carlton from the University of Chicago, refuted Shapiro's model as overly complicated and rejected his conclusions.

AT&T has said it needs to buy Time Warner to compete with the likes of Amazon, Netflix and Google in the shape-shifting streaming-TV environment. 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.

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