A federal judge said Tuesday that AT&T‘s $85.4 billion purchase of Time Warner is legal, clearing the path for a deal that gives the pay-TV provider ownership of cable channels such as HBO and CNN as well as film studio Warner Bros.
U.S. District Court Judge Richard Leon did not impose conditions on the merger’s approval.
Shares of Time Warner jumped nearly 5 percent in extended trading. Shares of AT&T dropped more than 2 percent.
The decision comes after a six-week trial. The Justice Department sued last year to block the merger, citing concerns that AT&T, owner of satellite television provider DirecTV, could charge rival distributors more for Time Warner content, resulting in higher prices for consumers.
AT&T countered that the logic doesn’t hold up since the point of owning content is to get widespread distribution, which brings in affiliate fees and advertising revenue.
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