WASHINGTON — A federal judge on Tuesday approved the blockbuster merger between AT&T and Time Warner, rebuffing the government's effort to block the $85.4 billion deal, in a decision that is expected to unleash a wave of takeovers in corporate America.
The judge, Richard J. Leon of the U.S. District Court in Washington, said the Justice Department had not proved that the telecom company's acquisition of Time Warner would lead to fewer choices for consumers and higher prices for television and internet services.
The merger would create a media and telecommunications powerhouse, reshaping the landscape of those industries. The combined company would have a library that includes HBO's hit "Game of Thrones" and channels like CNN, along with vast distribution reach through wireless and satellite television services across the country.
Media executives increasingly say that content creation and distribution must be married to survive against rising technology companies like Amazon and Netflix. Those two companies started making their own programming in just the last several years. But those tech companies now spend billions of dollars a year on original programming, and users can stream their video on apps in homes and on mobile devices, pulling attention from traditional media businesses.
Executives and investors had watched the six-week trial closely, looking for signs about how it might alter their ambitions. Comcast, for example, would like to outbid the Walt Disney Co. for some of 21st Century Fox's assets, but has held off until the trial ended.
The ruling is a major setback for the Justice Department and its antitrust chief, Makan Delrahim, whose decision to sue to block the deal broke with convention. Deals such as this one, in which the two companies are in related industries but do not produce competing products, are usually approved by federal regulators.
Delrahim had insisted that the two companies sell some major parts before getting government approval, a demand that the executives rejected. That led to the Justice Department's lawsuit, filed in November.
Leon's opinion may also increase the chances that other deals already reached, like CVS' bid for Aetna and T-Mobile's proposed merger with Sprint, will survive regulatory scrutiny.
Presidential politics clouded the merger from almost the moment it was announced. President Donald Trump, while still a candidate, said he would block the deal "because it's too much concentration of power in the hands of too few."