AT&T secured court approval on Tuesday to buy Time Warner for US$85 billion, beating an attempt by the Trump administration to block the blockbuster deal.
“I conclude that the government has failed to meet its burden” to show that the merger was likely to substantially lessen competition, a federal judge in Washington said, Reuters reports.
The merger was approved without conditions and is seen as a turning point for the media industry, the report said, noting that the decision is likely to set off a wave of corporate takeovers.
Giving his ruling, US District Judge Richard Leon called one of the government’s positions “gossamer thin” and another as “poppycock.”
In a scathing opinion, he urged the US Justice Department not to seek a stay of his ruling, saying it would be “manifestly unjust” to do so and not likely to succeed.
“That’s a legal shocker,” J.B. Heaton, an attorney and consultant on litigation and regulatory proceedings, told Reuters.
“I think we’ll see now that companies will be much more confident about vertical mergers,” he added, referring to acquisitions which tie together different parts of a business, such as production and distribution.
The Justice Department had filed a lawsuit to stop the deal in November 2017, saying that AT&T’s ownership of both DirecTV and Time Warner would give AT&T unfair leverage against rival cable providers that relied on Time Warner’s content.
Leaving the courtroom, Makan Delrahim, head of the Justice Department’s antitrust division, said he will read the judge’s opinion before making a decision on an appeal.
AT&T applauded the court’s decision. “We look forward to closing the merger on or before June 20,” a day before the contractual deadline with Time Warner, said David McAtee, AT&T general counsel.
The court approval comes despite criticism from Trump, a frequent detractor of Time Warner’s CNN and its coverage. The deal was announced in October 2016 and quickly denounced by Trump.
The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data.
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