Judge clears AT&T’s $85 billion bid for Time Warner with no conditions
- AT&T announced that it was buying Time Warner for $85.4 billion in October 2016.
- The Justice Department sued last year to block the merger, citing concerns that AT&T, owner of satellite television provider DirecTV, could charge rival distributors more for Time Warner content, resulting in higher prices for consumers.
- The outcome of the trial could have implications for future deals in the telecom and media industries, as well as vertical mergers, where companies combine with their suppliers.
A federal judge said Tuesday that AT&T‘s $85.4 billion purchase of Time Warner is legal, clearing the path for a deal that gives the pay-TV provider ownership of cable channels such as HBO and CNN as well as film studio Warner Bros.
U.S. District Court Judge Richard Leon did not impose conditions on the merger’s approval.
Shares of Time Warner jumped nearly 5 percent in extended trading. Shares of AT&T dropped more than 2 percent.
The decision comes after a six-week trial. The Justice Department sued last year to block the merger, citing concerns that AT&T, owner of satellite television provider DirecTV, could charge rival distributors more for Time Warner content, resulting in higher prices for consumers.
AT&T countered that the logic doesn’t hold up since the point of owning content is to get widespread distribution, which brings in affiliate fees and advertising revenue.
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