On Tuesday, the $85 billion acquisition of Time Warner by AT&T was approved by Judge Richard Leon in U.S. District Court. The combination of the two will likely spawn more megamergers across the ever-changing digital media industry.
The current White House administration opposed this merger, which will join one of the nation’s largest providers of telecom with a powerhouse in the media world that is owner of DC Comics, Warner Bros. movie studio and networks on cable television such as CNN, HBO, TNT and TBS.
The 200-page opinion of the judge allowed the merger without any conditions. The transaction should close on or prior to June 20, said the lead lawyer for AT&T Daniel Petrocelli.
Besides the impact for the two companies, this merger should spur several other deals in the industry. On attorney who specializes in antitrust cases said that a number of deals waiting to hear this decision will now move forward in quick-like fashion.
Outside court, Assistant Attorney General Makan Delrahim was disappointed and said the Justice Department would review the judge’s decision and see what impact it has on other mergers.
In a prepared statement the federal agency said that the DOJ continued to believe the pay-TV market is going to be less innovative and less competitive because of the merger approved today. The statement added that the DOJ would closely review the opinion of the court and consider its next steps because of the commitment it has in preserving competition for American consumers’ benefit.
Leon was also the judge that approved the acquisition by Comcast of NBC Universal seven years ago. In that merger case, Leon listed conditions the new company had to follow, of which one was not to gouge competitors that wanted to carry content from NBC.
The Department of Justice pressured Time Warner to liquidate Turner Broadcasting, which was made up of CNN or other parts of the business but both companies were resistant to that and have now won the battle.
Leon cited in the opinion he released the tectonic changes that have been brought about through companies such as Netflix, Amazon, and Hulu, and consumers decisions to cut the cord,
During afterhours trading on Tuesday, Time Warner stock was up almost 5% following the news while AT&T shares fell by just less than 3%.
Other stocks in the media industry saw big moves in their prices following the judge’s ruling including 21st Century Fox as its shares moved up 5%.