Quantcast

AT&T (T) Sinks, Time Warner (TWX) Gains as Federal Judge Approves Merger


Shutterstock photo

A federal judge has approved AT&T's T $85 billion merger with Time Warner TWX , handing the telecom giant a massive victory in what has been the most intense antitrust case in decades.

Shares of AT&T sunk in after-hours trading shortly after the news, while Time Warner stock added as much as 4.5%. The judge's decision will apparently allow AT&T to buy Time Warner without any significant conditions.

Analysts have said that such a decision might limit the government's power to restrict mergers in the future, with many pointing to potential tie-ups between CVS CVS and Aetna AET , or Disney DIS and 21 st Century Fox FOXA , as deals that could be affected by this precedent.

Judge Richard Leon filed the decision, which will ignite AT&T's content ambitions and put the company in a better position to battle tech-media hybrids like Netflix NFLX , Amazon AMZN , and Alphabet GOOGL .

Government prosecutors attempted to argue that a combination of AT&T's distribution network-its cellular and wired broadband infrastructure-and Time Warner's original content-HBO, Warner Bros., and Turner Broadcasting-would create an anticompetitive environment in today's evolving communications and media sector.

Now, AT&T will leverage those new properties to create a new telecom-media behemoth.

Initial investor reaction likely reflects hesitation toward the costs associated with the deal, but it is hard to think that the merger does not present exciting potential for AT&T.

Want more market analysis from this author? Make sure to follow @ Ryan_McQueeney on Twitter!

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Time Warner Inc. (TWX): Free Stock Analysis Report

The Walt Disney Company (DIS): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Netflix, Inc. (NFLX): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

AT&T Inc. (T): Free Stock Analysis Report

Aetna Inc. (AET): Free Stock Analysis Report

Twenty-First Century Fox, Inc. (FOXA): Free Stock Analysis Report

CVS Health Corporation (CVS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: DIS , AMZN , NFLX , GOOGL


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research








Research Brokers before you trade

Want to trade FX?