A U.S. District Court judge on Tuesday approved AT&T’s plan to acquire Time Warner, dealing a huge blow to the Trump Administration’s attempt to kill the deal.
The Justice Department had filed a lawsuit seeking to have the deal scrapped, arguing that it would harm competition.
Judge Richard J. Leon said the government failed to provide sufficient evidence to show that consumers would end up paying high prices for internet and television services as a result of the merger.
AT&T General Counsel David McAtee issued a statement after the ruling saying, “We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner.
We thank the Court for its thorough and timely examination of the evidence, and we complement our colleagues at the Department of Justice on their dedicated representation of the government.
“We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative,” McAtee added.
It is not clear what steps the government will take after yesterday’s court decision.
The Financial Times on Wednesday reported that there was a high possibility that the government would appeal. Speaking to members of the press after the verdict, Assistant Attorney General Makan Delrahim said, “We are disappointed with the Court’s decision today. 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. We will closely review the Court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers.”
The ruling paves the way for the creation of a telecommunications and media merger, restructuring the two industries.
The two companies hatched the deal in 2016 but the government stepped in with the lawsuit seeking to block it.
AT&T will acquire Time Warner’s content, including Warner Bros, CNN, N.C.A.A. and live N.B.A sporting rights, as well as popular HBO shows, such as Westworld and Game of Thrones.
AT&T’s victory telegraphs a green light to other similar agreements that are likely sprout in future.
CNBC reported that Comcast is already planning to place a formal bid for some assets of 21st Century Fox, after yesterday’s historic ruling.
If that happens, Comcast is likely to be engaged in a fierce war with Walt Disney, which is also seeking to acquire the Philadelphia-based company.
Shares of AT&T fell 5% in midday trading on Wednesday, while those of Time Warner gained 3%.
Stocks of other media/entertainment companies reacted to the Tuesday’s ruling with Fox shares climbing 7% after closing. Shares of CBS jumped 5%, while those of Comcast dipped 3% in the morning trading session on Wednesday.
Walt Disney saw its shares fall 1.5%, while Netflix popped 4.7%. Marketwatch FT