This deal is anticipated to have a domino effect and lead to other mergers. Photo/Associated Press.
A federal judge approved AT&T's US$85 billion (NZ$121 billion) purchase of Time Warner on Tuesday, handing the telecom giant a massive victory that could clip the ambitions of US regulators seeking to block big corporate tie-ups.
The case - one of the most closely watched antitrust trials in decades -
is viewed as a bellwether for other deals waiting in the wings. From Comcast's bid for 21st Century Fox to CVS's acquisition of Aetna, massive corporations increasingly have sought to expand their reach by buying up companies in different lines of business. The judge's decision, which is allowing AT&T to merge with Time Warner without conditions, shows the federal government may struggle to rein in such mergers.
"I think for business, in general, it's going to be seen as a green light for mergers. I think you'll see a lot of people using it as an opportunity to push mergers they may have been thinking about," said Ed Black, president of the Computers and Communications Industry Association, a trade group in Washington that represents companies like Amazon, Facebook and Google.
In handing down his ruling, federal judge Richard Leon said the Justice Department - whose antitrust chief, Makan Delrahim, brought the rare case - failed to provide sufficient proof that the deal would harm competition or consumers. He also warned the US government against bringing an appeal if the purpose was to try to stymie the deal, though the DOJ has not indicated its next steps.
To AT&T, however, goes the grand prize: a premier piece of the entertainment world. The decision means the telecom giant will now control highly-sought after programming - including Game of Thrones, the Harry Potter movie franchise, and CNN - as well as the infrastructure that delivers that content to tens of millions of living rooms televisions and smartphones. Beyond its wireless network and internet service, AT&T acquired DirecTV in a US$67 billion deal in 2015, which also had the blessings of government regulators.
