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Judge OKs AT&T-Time Warner's $85B Merger

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A federal judge in Washington today approved AT&T’s $85 billion merger with Time Warner.

The ruling from U.S. District Judge Richard Leon draws to a potential close one of the most important and influential antitrust cases in decades. The Justice Department surprised experts by even bringing the suit. This is the first time in at least 40 years the U.S. has challenged a vertical merger.

Lawyers representing companies with potential mergers in the works have followed the trial’s developments, with the expectation that Tuesday’s outcome could have ripple effects for their proposed deals, such as efforts by CVS Health plans to buy Aetna Inc., and efforts by Cigna Corp. to acquire Express Scripts.

A copy of the decision is available here.

(Related: Deal-Hungry Companies Hang on Judge’s Word as AT&T Ruling Looms)

O’Melveny & Myers partner Daniel Petrocelli, who represented AT&T, said immediately after the ruling he was “extremely pleased with the court’s decision that this merger will finally close” after “a long time.” He said the “evidence throughout the trial was quite clear and we’re very pleased the court saw it the same way.”

Makan Delrahim, the DOJ’s antitrust chief, said outside the courtroom, “We’re disappointed with the court’s ruling and we’ll review the opinion and take a look at our next steps consistent with our missions to protect competition and consumers.”

The government first launched its bid to block the AT&T-Time Warner merger last November. AT&T, a service provider that also owns DirecTV, announced in 2016 it would bring Time Warner, a content producer that counts CNN, HBO, and live sports programming in its offerings, into its fold.

AT&T argued the deal was necessary to keep up with companies such as Netflix, Amazon and Google.

But the government’s lawyers, led by Craig Conrath, a veteran of the Antitrust Division, argued the merger would hinder rival content distributors. They said the new company could hike prices for their content, a move that would hurt consumers, or threaten to yank programming from competitors.

— Read Cigna-Express Scripts Deal to Face Justice Department Reviewon ThinkAdvisor.

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