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AT&T-Time Warner Dream Deal Hangs on Judge's Decision

U.S. District Judge Richard Leon will only need a short time Tuesday to make an AT&T-Time Warner deal official or -- if government antitrust enforcers prevail -- block the deal, reports the Wall Street Journal (June 12, Fitzgerald, Kendall). The two companies have spent almost two years planning and defending their tie-up as the best way to take on bigger digital rivals. Leon is planning to announce his decision in open court at 4 p.m. ET, culminating "a 20-month legal slog" that has taken up an enormous amount of both companies' time and attention while their industry changes around them. According to the Journal, "a win for AT&T and Time Warner will vindicate their leaders' survival-of-the-biggest philosophy, creating a vertically-integrated giant with movie studios, television channels, satellites, cellphone networks, and fiber optic cables all under the same roof."

Axios (June 12, Fischer, McCabe) states that a victory for AT&T would likely make it easier for TV networks to merge with a technology or telecommunications company, essentially fusing the content delivery systems with the content itself. "If AT&T prevails, it could cause 21st Century Fox to seriously consider Comcast's higher offer over Disney's bid," the publication adds. 'An AT&T win also bolsters T-Mobile's case to regulators that it should be allowed to buy Sprint." Additionally, it would signal to all American businesses that a vertical merger has a good chance of receiving regulatory approval. On the other hand, a decision in the Department of Justice's favor will raise questions about a number of outstanding deals, most notably in industries like healthcare where CVS is attempting to acquire Aetna and Cigna is angling to purchase ExpressScripts.