Today's ruling comes as part of the antitrust lawsuit levied by the Justice Department previous year.
The case has drawn attention from all sides including Sling TV's President Warren Schlichting, who testified against the merger.
The decision from U.S. District Judge Richard Leon gives AT&T an entry into the media business with control over popular brands like cable networks CNN, HBO, TNT and TBS. "We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner".
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.
But AT&T failed to provide any evidence suggesting that the DOJ's prosecution of the merger had "discriminatory effect and discriminatory intent", Leon said in a ruling earlier in the trial. In recent decades, the government's antitrust enforcement actions have focused on deals where one company threatened to dominate too much of a specific industry. He rejected the government's argument that it would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.
Some thought Trump had pressed for the lawsuit because of his animus toward Time Warner's CNN. But the Department of Justice sued to block the $108 billion merger in November 2017, saying the deal is likely to raise consumers' TV bills.
The lawyer added that the merger would be completed no later than June 20 of this year.
Shares of AT&T dropped - and stock shot up - after a judge's decision to allow the telco's $85 billion takeover of the media conglomerate to proceed.
As one carrot to get deal approval, AT&T CEO Randall Stephenson mentioned in court that AT&T will be debuting a new skinny streaming service in the near future.
AT&T and Time Warner said they need to combine in order to better compete with Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOG), companies that are already powerhouses in the content game.
"We are disappointed that the court missed an opportunity to rein in the First Amendment-crushing mass media consolidation trend, which puts too much media power in the hands of too few", Manning said in a statement.
"We are gratified that the court's decision to categorically reject the government's bid to block this historic merger", he said.
The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers - who spend more time watching video on phones and tablets and less time on traditional live TV on a big screen.
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