AT&T slips after Time Warner buyout gets approval

(Reuters) - Shares of AT&T Inc fell 2 percent on Wednesday after a federal judge approved the telecom company's $85 billion buyout of Time Warner Inc, clearing the path for more deals in a rapidly changing media industry.

The news lifted shares of other telecom and media companies such as Sprint Corp, CBS Corp and Discovery Inc by around 4 percent in premarket trading. Time Warner was also up about 5 percent.

"Once technically driven volatility wears off we expect the stock to move higher as closure will likely provide a new investor catalyst including $1.5 billion in anticipated cost synergies," said Cowen & Co analyst Colby Synesael.

However, at least one analyst raised concerns about the debt AT&T was taking on as part of the deal.

"Time Warner will be a positive for AT&T's income statement, at least initially. But it will be a negative for the balance sheet," said research firm Moffett Nathanson's Craig Moffett, who downgraded the stock to "sell".

"The new AT&T will carry an astounding $249 billion of debt."

The approval for the deal, which was opposed by President Donald Trump's administration, marks a turning point for cable, satellite and wireless carriers all eyeing to buy content companies as a way to add revenue.

Following the approval, investors are looking out for an announcement from U.S. cable operator Comcast Corp, which last month said it was preparing to outbid Walt Disney Co's $52 billion offer to buy most of Twenty First Century Fox Inc's assets.

(Reporting by Laharee Chatterjee in Bengaluru; Editing by Saumyadeb Chakrabarty)