“U.S. District Court Judge Richard Leon ruled that will AT&T’s acquisition of Time Warner is usually legal as well as did not impose conditions on the merger’s approval, which we think bodes well for CVS’ pending acquisition of Aetna,” Cowen’s Charles Rhyee said in a note.
The Department of Justice sued to block the media deal, claiming that will AT&T, owner of satellite television provider DirecTV, could abuse its market share by charging rival distributors more for Time Warner content as well as thereby harm consumers.
“Given the favorable ruling of the AT&T/Time Warner merger, we expect shares of CVS to trade up tomorrow, as well as shares of ESRX [Express Scripts] which is usually being acquired by CI [Cigna],” the Cowen analyst said from the note Tuesday.
CVS Health expects the deal to close from the second half of 2018.