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AT&T wins U.S. court approval to buy Time Warner for $85 billion

Reuters  |  WASHINGTON 

By and David Shepardson

WASHINGTON (Reuters) - Inc won approval from a on Tuesday to buy Inc for $85 billion, without conditions, allowing to compete with companies that dominate and providing new sources of revenue.

The planned deal is seen as a turning point for a that has been upended by companies like and which produce content and sell it online directly to consumers, without requiring a pricey cable subscription. Distributors including cable, satellite and all see buying content companies as a way to add revenue.

The ruling could also prompt a cascade of companies buying television and makers, with Corp's bid for some assets potentially the first out of the gate.

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to data. It would also be the 12th largest deal in any sector, the data showed.

"I conclude that the government has failed to meet its burden of proof," told the court. He called one of the government's arguments against the deal "gossamer thin."

The in a scathing opinion urged the not to seek a stay of his ruling, saying it would be "manifestly unjust" to do so and not likely to succeed.

Shares of were about flat in after-hours trade following the decision, while rose more than 5 percent.

The Justice Department filed a lawsuit to stop the deal in November 2017, saying that AT&T's ownership of both and would give AT&T unfair leverage against rival cable providers that relied on Time Warner's content, such as and HBO's "Game of Thrones."

AT&T in a six-week trial argued that the purchase of Time Warner would allow it to gain information about viewers needed to target digital advertising, much like and Alphabet Inc's already do.

AT&T and other need to find new sources of revenue as the mobile phone market stagnates and more customers abandon pricey cable and for they can watch on their phones or televisions.

The government estimated costs to industry rivals, such as Inc , would increase by $580 million a year if AT&T owned Time Warner.

To assuage the Trump administration's criticisms, AT&T offered to submit pricing disagreements with other companies over Turner's channels to third-party arbitration. The companies further offered not to black out programming during arbitration for seven years.

Announced in October 2016, the deal was quickly denounced by Donald Trump, who as a candidate and later as has been critical of Time Warner's and its coverage.

Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but Leon of the U.S. for the rejected their bid to force the disclosure of communications that might have shed light on the matter.

The deal cost AT&T's top lobbyist, Bob Quinn, his job in May after it became public that AT&T had paid Trump's $600,000 for advice on winning approval.

The ruling could also have implications for CBS Corp's potential tie-up with Viacom Inc , which is already uncertain because of a lawsuit between CBS's controlling shareholder, Shari Redstone, and its board.

(Reporting by and David Shepardson; Additional reporting by in Washington and Sheila Dang in New York; Writing by Peter Henderson; Editing by Lisa Shumaker)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, June 13 2018. 02:36 IST