Here’s why the AT&T-Time Warner merger just got approved

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As reported by CNBC, the global telecommunications conglomerate was willing to offer $60B in cash for the Rupert Murdoch-founded company.

While Comcast has made no secret of its desire to buy up Fox from the Murdoch clan, the chances of any deal actually going through were undercut by fears the merger would not be passed by government regulators. The Fox television network and some cable channels including Fox News and Fox Business Network would stay with Murdoch's family under either deal, as with the newspaper and book businesses under a separate company, News Corp. Disney has made its own $52.4 billion bid for the bulk of the company.

For months AT&T efforts to merge with Time Warner have been held up by the Department of Justice efforts to block the merger. Numerous company's assets were long thought to be acquired by Disney, but as promised, Comcast has now officially swooped in with a superior offer to acquire Fox's film studio, most of its TV channels, and more. In addition the cable giant says it will reimburse Fox the full $1.525bn break-up fee it would owe Disney if Team Rodent's offer is turned down.

"Common sense tells you that this degree of concentrated power isn't right", wrote Zephyr Teachout, a candidate for attorney general of NY, wrote immediately following the judge's ruling. Leon ruled it had failed to prove that the deal would suppress competition in the pay-TV industry. Prior to the deal, Fox had entertained a much higher bid from Comcast in the low $60 billion range but ultimately terminated talks early on due to antitrust concerns.

Makan Delrahim, the Justice Department's top antitrust official, said the government was disappointed in the ruling and would "consider next steps".

The merger agreement will have no conditions imposed on it by the court
The merger agreement will have no conditions imposed on it by the court

One of the biggest deals in Hollywood is now unfolding as the Walt Disney Company is making moves to purchase a majority of 21st Century Fox's film and TV licenses.

AT&T argued that its proposed acquisition of Time Warner is a defensive move against the increasing threat of internet TV services like Netflix, Amazon, and YouTube. And because Comcast has less of a presence outside the U.S., the company expects it can get worldwide clearance easily.

Now that a federal judge has approved AT&T's $85 billion takeover of Time Warner, other companies are likely to rush to consolidate.

"Compare today to the 50s or 60s when we had three television stations and you had one AT&T that was, then, protected by government monopoly", Crews said.

Number three wireless carrier T-Mobile, meanwhile, is seeking a tie-up with number four Sprint. Interestingly enough, Fox stated its board of directors recommends they vote in favor of selling to Disney. However, in recent weeks, we've heard rumblings that Comcast was looking to make a more generous, all-cash offer...but is this something the government would allow?

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