Judge: Gov't evidence "too thin" in AT&T case

Judge: Gov't evidence

Judge: Gov't evidence "too thin" in AT&T case

"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", McAtee said in a statement. The transaction will close on or before June 20, AT&T's lead lawyer, Daniel Petrocelli, told reporters after the ruling. "We strongly urge the Justice Department to appeal this decision all the way to the Supreme Court if necessary".

The Justice Department had argued that AT&T's acquisition of Time Warner would allow it to charge premium prices to rivals who relied on its Turner and HBO channels to woo customers to their cable plans, potentially giving it an unfair advantage in the pay-TV market.

The judge's ruling is being seen by tech and telecom giants as a green light to pursue a slew of major media acquisitions.

Although AT&T does not have to go through with the merger and Time Warner does not have to accept, with federal approval the $85.4 billion deal is now virtually complete. It's the first major deal to face opposition from the Justice Department in the Donald Trump era, making its fate of utmost importance to the M&A community. A clear win for AT&T will embolden Comcast, the US's largest cable company, to top Walt Disney's $52bn bid for 21st Century Fox, the media empire controlled by Rupert Murdoch and his family.

Prior to the news on the decision in the case, AT&T stock closed up 0.5% (to $34.50 per share) and Time Warner closed up 0.05% in regular trading (to $96.22 per share) which concluded at 4 p.m. ET. "AT&T and Time Warner concluded that each had a problem the other could solve", he wrote.

AT&T said it needed Time Warner to survive in a rapidly changing media landscape, especially to compete against giants like Netflix and Amazon.

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AT&T and Time Warner say the combined company can leverage viewer data to make better content to sell more targeted ads, which they claim could help lower prices for consumers.

Still, at least one company, Comcast, the largest U.S. cable provider, had been waiting for the court decision before making any large M&A moves in media, sources have said.

The court ruling could also open the door for Verizon, AT&T'S main rival, to bid for a media company, UBS' Hodulik added.

U.S. District Judge Richard Leon rejected the government's argument that the AT&T-Time Warner combination would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.

The judge presiding over the government's legal effort to block AT&T's purchase of Time Warner will likely deliver his verdict on Tuesday, June 12, 2018. At a campaign rally in 2016, Trump said his administration would not approve the deal, raising concerns over political interference. But Leon denied AT&T's request to disclose any communications between the White House and Attorney General Jeff Sessions about the merger and between Sessions and the department's antitrust division, keeping such speculation a mystery. In other words: Calculated using expected revenue, AT&T is paying $36 billion for the portion of Time Warner's business that comes from AT&T's competitors.

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