A rejection might have chilled possible multibillion-dollar deals involving other media companies.
However, in Verizon's most recent quarterly earnings call, executives said they would rather sit out the current consolidation, and instead build out its content offerings through partnerships with independent media companies. Last fall, he presented AT&T and Time Warner with two options: Sell the majority stake in either DirecTV or Turner Broadcasting. Meanwhile, shares of wireless carrier Sprint was rallying as much as 5% following the ruling amid speculation that a merger with rival T-Mobile was now more likely.
Analysts say the decision will bolster firms such as Comcast - which is considering bidding for 21st Century Fox assets, including its stake in Sky, in a challenge to a deal announced between Fox and Disney past year. Prior to the announcement of a deal between Disney and Fox, it was reported that one of the key reasons Fox rejected Comcast's initial bid was because the company feared the deal would fall through due to antitrust concerns. It would also be the 12th largest deal in any sector, the data showed.
Leon rejected the government's position, which could lead to a flurry of entertainment mergers. But, he added, "the government's evidence is too thin a reed for this court to rely on".
Judge Leon delivered his opinion in a closed courtroom packed with reporters and telecom industry-watchers.
And Leon also warned the USA government against bringing an appeal if the goal was to try to stymie the deal.
The companies have until June 21 to close the merger, per their previously set deadline. Even if a company doesn't need to get bigger right away, it might need to do so to prevent a competitor from overshadowing it.
"Regardless of what happens on the appeal front, expect Comcast to put forth an all-cash bid in the next day or so at a premium to Disney", said Mary Ann Halford, senior adviser to OC&C Strategy Consultants. The Walt Disney Company is also looking to make an offer on the company.
But some experts urged caution in thinking that the DOJ's top antitrust official Makan Delrahim would allow a Comcast-Fox deal to go through unopposed.
Judge Leon reportedly put no conditions on the deal and the result of this case stands to have far-reaching effects on the media landscape and other groups considering or seeking vertical mergers.
The acquisition will create one of the most powerful companies in global media, marrying AT&T's widespread consumer distribution capabilities with the crown jewels of Time Warner, including HBO, Warner Bros. film and TV studios, and TV channels including CNN, TNT and TBS. AT&T asked the court to focus on the former.
The ruling comes in direct opposition to the United States Department of Justice, which sued to block the deal.
After a six-weeks-long trial, Federal Judge Richard J. Leon issued his final ruling today that AT&T can proceed with its merger with Time Warner, via The New York Times. Here's why: In bringing the suit, the Justice Department's.