Time Warner Stock Jumps, AT&T Falls After Ruling Clears Path to Merger

Courts To M&A Bankers “Everbody Gets Laid!”

Shares of AT&T were about flat in after-hours trade following the decision, while Time Warner rose more than 5 percent. "In the meantime, not only may consumers be harmed directly by the anticompetitive harms that this merger will cause, such as higher bills and fewer choices of programming and provider, but also by the many other mergers it will encourage".

Fans have been following the Disney/Fox deal closely, as a merger between the two companies would mean Marvel Studios would reacquire the rights to the X-Men and Fantastic Four franchises, both of which have been under Fox's control for decades. Distributors including cable, satellite and wireless carriers all see buying content companies as a way to add revenue.

AT&T would use its leverage over the must-have shows, in particular HBO's Game of Thrones or National Basketball Association games on TNT, to charge Comcast or Verizon more than it would charge itself for distributing Time Warner channels, giving itself a competitive advantage, the government claimed.

A federal judge on Tuesday gave his blessing to telecom giant AT&T's drive to take over the Time Warner media conglomerate.

According to Deadline, CEO Brian Roberts told investors during the company's annual shareholders meeting early Monday morning that Comcast is in the "advanced stages" of preparing a bid for 21st Century Fox - an offer dependent on the ruling in the AT&T-Time Warner anti-trust case, which is expected later today.

Leaving the courtroom, Makan Delrahim, head of the Justice department's antitrust division, said that he would read the judge's opinion before making a decision on an appeal.

Courts To M&A Bankers “Everbody Gets Laid!”

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 Facebook Inc and Alphabet Inc's Google already do.

The decision by the Justice Department to sue to block the merger caught AT&T and many others in the media industry by surprise.

The merger is a direct response to the success of "alternative" media services like Netflix and Amazon. It's unclear at the present time if Fox will stick with the Disney deal or start a potential bidding war. AT&T's chief executive officer, Randall Stephenson, said the hiring had been "a big mistake". AT&T lawyers initially sought email correspondence between Trump's White House and the Justice Department, but Leon declared that any communications were not relevant to the trial, and AT&T relented. Announced in October 2016, it was seized on by then presidential candidate Donald Trump as the sort pf deal his administration would block. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers.

Time Warner's sale could shape how much United States consumers pay for streaming TV and movies. Customers will benefit from new bundles and offerings made possible by the merger, and the combined company will "develop new ad-supported video models that shift more costs to advertisers and off consumers", AT&T argued.

AT&T, meanwhile, saw its share price fall 2.1 percent, to $33.63, after the ruling was revealed.

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