Why the AT&T mega-merger is a green light for other businesses

AT&T, Time Warner Merger Approved by Judge

A federal judge approved AT&T's $85 billion purchase of Time Warner on Tuesday, handing the telecom giant a massive victory that could hamper the ambitions of USA regulators seeking to block big corporate mergers.

AT&T rebuffed those claims made by the Justice Department and Trump, saying similar mergers are "routinely approved because they benefit consumers without removing any competitor from the market".

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

Not only did Leon, an appointee of former President George W. Bush, greenlight the mega media deal without conditions, he slammed the DOJ for their handling of what he called an "epic battle" that likely cost "easily in the tens of millions", according to his 172 page memorandum opinion. The company could offer to sell off assets that the government says could contribute to anti-competitive practices. "I think you'll see a lot of people using it as an opportunity to push mergers they may have been thinking about", said Ed Black, president of the Computers and Communications Industry Association, a trade group in Washington, District of Columbia, that represents companies like Amazon, Facebook and Google.

Judge Leon's decision is sure to open the doors to more mergers involving media companies as content continues to drive the ISP and the wireless industries.

A Comcast had no comment on Tuesday night. With the judge's ruling, AT&T is now clear to take ownership of HBO, Turner Networks-home to CNN, TNT and TBS-as well as Warner Bros.

The AT&T logo on a retail store.

District Judge Judge Richard Leon has tossed the Department of Justice's lawsuit against AT&T to block the telecom's acquisition of Time Warner.

But Salil K. Mehra, a professor at Temple's Beasley School of Law and an expert on antitrust, said "this is a courageous new world in which leverage issues and the data collection on individuals make it harder to predict what will happen".

In the past, the federal antitrust attorneys didn't seem to be bothered if auto manufacturers owned the companies that stamped out fenders or auto bodies. 'We're chasing their tail lights, ' Petrocelli said. AT&T's chief executive officer, Randall Stephenson, said the hiring had been "a big mistake". But the Justice Department's antitrust vigor is now considerably diminished.

The last time it tapped the capital markets in July, the company only had to pay investors 3.5bp-9bp in new issue concessions when it brought a US$22.5bn blockbuster bond deal for the proposed merger. At a campaign rally in 2016, Trump said his administration would not approve the deal, raising concerns over political interference.

While the motive behind the challenge to AT&T's deal may never be known, Blair said politicizing the process would be "extremely risky for the country".

AT&T Inc won approval from a U.S. court on Tuesday to buy Time Warner Inc for $85 billion, without conditions, allowing AT&T to compete with internet companies that dominate digital advertising and providing new sources of revenue.



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