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AT&T takeover of Time Warner cleared

June 13, 2018

A US District Court judge has cleared the merger of US telco giant AT&T and entertainment conglomerate Time Warner, in a what will be deemed as a significant blow to the Trump administration which has vocally denounced any potential deal.

US district judge Richard Leon said the government’s objections “rested on improper notions” and warned against an appeal. “I hope the government has the wisdom and courage [not to seek a stay]”, he said.

The ruling comes some 20 months after AT&T first announced its plans to buy Time Warner in a transaction then worth almost $85 billion (€72.3bn).

The deal is set to unite AT&T’s wireless, DTH and online business with Time Warner’s blue-chip media properties, which include HBO and CNN.

“We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner, said David McAtee, AT&T General Counsel in a Statement. “We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government.  We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”

According to Michael Nathanson, Senior Analyst at MoffetNathanson, the Judge’s “resounding rebuke”of the US Department of Justice’s lawsuit against AT&T is the best outcome for Fox, OK for Time Warner and not great for DISH.

He suggests the decision will likely be interpreted by Comcast as a green light to bid for Fox’s assets. As for Disney, this legal outcome was probably the least attractive. “However, we continue to believe that Disney has the superior balance sheet, cost of debt, equity and rationale to emerge victorious over Comcast in a bidding war,” he advises.

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