Judge approves $85 billion AT&T-Time Warner deal

Judge approves $85 billion AT&T-Time Warner deal

Judge approves $85 billion AT&T-Time Warner deal

AT&T and Time Warner are not competitors; theirs would be a "vertical integration" of complementary companies: Time Warner makes the TV shows (and movies and news programming and so forth), while AT&T offers the satellite and cable TV services and mobile phone systems on which people consume such content.

United States district judge Richard Leon sided with AT&T, approving the deal without conditions.

AT&T, in turn, said it needs Time Warner to have a fighting chance against tech giants like Google and Facebook.

In the lawsuit brought forward by the Department of Justice, Judge Richard Leon sided against the government's claims that the $85.4-billion deal between the two companies would violate antitrust laws and unfairly lead to higher prices for consumers.

A federal judge approved AT&T's $85 billion purchase of Time Warner on Tuesday (June 12), handing the telecom giant a massive victory that could clip the ambitions of USA regulators seeking to block big corporate tie-ups. But looking beyond today, the merger could have a strong effect on future deals. Many believed that these types of deals were unlikely to be blocked by the government, as they were thought to pose less risk of harm to the consumer.

While this court case is decided, the U.S. Department of Justice could appeal the ruling.

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CNN is owned by Time Warner. Comcast, for instance, owns NBCUniversal, and Verizon owns websites including Yahoo and HuffPost.

Media executives increasingly say that content creation and distribution must be married to survive against rising technology companies like Amazon and Netflix. Entertainment and a passel of cable channels including TNT, TBS and the Cartoon Network.

The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast Corp's bid for some Twenty-First Century Fox Inc assets potentially the first out of the gate. 21st Century Fox already agreed in December to sell those assets to Disney, which include all of the movie studio 20th Century Fox, a stake in Hulu, their stake in worldwide broadcaster Sky and many regional sports channels, among other assets.

Walt Disney shares fell 1.7 percent, to $102.57, while Comcast shares plunged 3.9 percent, to $31.12. But Leon declined to put any conditions on the deal. That means those who were hoping to see Disney take over the X-Men and Fantastic Four may not want to hold their breath.

In making that ruling, Leon reaffirmed the judiciary's traditional tolerance for "vertical integration" - the technical term for mergers between companies that operate related, but distinct, businesses.

Rival cable company Comcast is now likely to go ahead with its planned attempt to woo Fox away from Walt Disney Co, which said it would acquire most assets of the media company for around $50 billion past year. He noted that Time Warner owned CNN, and then declared his opposition to the $85 billion proposed sale. "This deal will accelerate content and streaming initiatives between Time Warner properties and AT&T and be a major shot across the bow to other cable and wireless players with all these assets under one hood". Plenty more details are sure to be revealed in the coming days and we'll be sure to keep you up to date as new information is made available.

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