AT&T has completed its $81 billion takeover of Time Warner, one of the biggest media deals ever. A federal judge approved the combination just two days earlier over objections by the Trump Justice Department that it would hurt consumers.
The merger could shape the way consumers stream TV and movies and how much they pay, and stands to usher in a new era of accelerating change and deal making in the media and telecom worlds.
The announcement came late Thursday from Dallas-based AT&T, a telephone, cable and satellite behemoth that now will own an array of TV networks and sought-after programming. The deadline to complete the merger was next week, but the closing came swiftly after the Justice Department signaled it wouldn't ask the court to postpone the merger while it pondered an appeal of the judge's decision.
On Tuesday, U.S. District Judge Richard Leon ruled against the government's attempt to block the megamerger on anti-competitive grounds. It was the first time in decades that the government had sued to block a merger of two companies that don't compete directly with each other.
A Justice Department official said regulators will continue to consider a possible appeal. The official spoke on condition of anonymity because a decision on an appeal hasn't been made.
In a statement announcing completion of the merger, AT&T CEO Randall Stephenson said the merger will let AT&T create "the future of media entertainment."
Leon's ruling followed a six-week trial that showcased the biggest legal wrangling over competition in decades. He rejected the government's argument that the phone and pay-TV giant's takeover of the entertainment conglomerate would hurt competition, limit choices and jack up prices for consumers to stream TV and movies.
The ruling allowed AT&T to absorb the owner of CNN, HBO, the Warner Bros. movie studio, "must-see" shows and coveted sports programming like college basketball championships.
Time Warner CEO Jeffrey Bewkes has agreed to remain with the company as a senior adviser during a transition period, AT&T's announcement said.
Leon had urged the government not to seek a judicial postponement of the merger for a possible appeal. He noted the "drop dead" deadline for completing the deal was June 21, and if wasn't wrapped up by then, either company could walk away and AT&T would have to pay Time Warner a $500 million "breakup" fee.
Some legal experts believe the government could have a hard time convincing the appeals court to overturn Leon's decision. Opposing the merger forced the antitrust regulators to argue against standing legal doctrine that favors mergers among companies that don't compete directly with each other.
AT&T has committed to certain conditions under which it will run Time Warner's Turner Broadcasting, which includes CNN. For instance, it will manage the Turner networks as part of a separate business unit, distinct from operations of AT&T Communications, which includes DirecTV and U-verse.
In addition, AT&T Communications will have no say in setting Turner's prices or other terms in contracts with companies that distribute its content.
The merger will fuse a company that produces news and entertainment with one that funnels that programming to consumers. AT&T cast it as a necessary step to compete against the likes of Amazon, Google and Netflix.
The ruling already has started opening the floodgates to deal making in the fast-changing worlds of entertainment production and distribution. A day after Leon ruled, Comcast launched a $65 billion cash bid for the bulk of 21st Century Fox — topping Disney's all-stock $52.5 billion offer in December.