WASHINGTON — A federal judge on Tuesday approved the blockbuster merger between AT&T and Time Warner, rebuffing the government’s effort to stop the $85.4 billion deal, in a decision that is expected to unleash a wave of corporate takeovers.
The judge, Richard J. Leon of United States District Court in Washington, said the Justice Department had not proved that the telecom company’s acquisition of Time Warner would lead to fewer choices for consumers and higher prices for television and internet services.
The merger would create a media and telecommunications powerhouse, reshaping the landscape of those industries. The combined company would have a library that includes HBO’s hit “Game of Thrones” and channels like CNN, along with vast distribution reach through wireless and satellite television services across the country.
Media executives increasingly say content creation and distribution must be married to survive against technology companies like Amazon and Netflix. Those companies started producing their own shows in just the last several years. But they now spend billions of dollars a year on original programming, and users can stream the video on apps in homes and on mobile devices, putting pressure on traditional media businesses.
Executives and investors of other companies had watched the six-week trial closely for signs about how it might affect their ambitions. Comcast, for example, would like to beat out the Walt Disney Company for some of 21st Century Fox’s assets, but has held off from making a formal bid until the trial ended.
“If there ever were an antitrust case where the parties had a dramatically different assessment of the current state of the relevant market and a fundamentally different vision of its future development, this is the one,” Judge Leon wrote in his opinion.
The ruling is a major setback for the Justice Department and its antitrust chief, Makan Delrahim, whose decision to sue to block the merger broke with convention. Deals such as this one, in which the two companies are in related industries but do not produce competing products, are usually approved by federal regulators.
Mr. Delrahim had insisted that the two companies sell some major parts before getting government approval, a demand that the executives rejected. That led the Justice Department to file its lawsuit in November. Judge Leon’s decision essentially confirmed the conventional thinking about antitrust law.
Mr. Delrahim appeared somber after the decision. He said he was disappointed and would review the 172-page opinion before deciding whether the government would ask a higher court to issue a stay of the ruling. The Justice Department could appeal the decision even if it did not get an injunction.
“I’ve taken an oath to uphold competition,” Mr. Delrahim said. “We are going to take the next steps as necessary.”
Judge Leon took the unusual step of warning the government not to try to seek a stay, saying it would hurt the defendants, which had already gone through an 18-month regulatory and legal battle for their review. The companies face a June 21 deadline to close their deal.
David McAtee, AT&T’s general counsel, said the company was pleased with the opinion and looked forward to giving “consumers video entertainment that is more affordable, mobile and innovative.”
Shares in AT&T fell 2.7 percent in after-hours trading, while shares in Time Warner jumped 4.5 percent.
The deal was hatched in August 2016 when Randall Stephenson, the chief executive of AT&T, called Jeff Bewkes, his counterpart at Time Warner. Mr. Bewkes’s company, with its popular HBO shows, live N.B.A. and N.C.A.A. sports broadcasting rights, and CNN, has been a takeover target for years.
The two then had a long lunch in the Time Warner dining room in New York and agreed that their industries were under siege. The purchase of Time Warner would give AT&T the premium television content it needed to make its bundle of wireless, television and broadband services more attractive to customers.
The deal would put AT&T in charge of Time Warner’s vast portfolio, which includes HBO and CNN, rights to major sports leagues, and valuable film franchises such as Harry Potter. John Stankey, an AT&T executive, would oversee the integration of these units into AT&T and eventually lead the Time Warner business.
“We want people engaged with their mobile devices all day watching movies and video,” Mr. Stephenson testified at the trial.
Presidential politics clouded the merger from almost the moment it was announced. President Trump, while still a candidate, said he would block the deal “because it’s too much concentration of power in the hands of too few.”
Those comments and his repeated criticism of CNN, which is owned by Time Warner’s Turner Broadcasting unit, raised speculation that Mr. Trump had pushed Mr. Delrahim and the Justice Department to block the deal.
But Mr. Delrahim swore to the court that he was not influenced by the White House, and Judge Leon stopped the companies from introducing evidence about possible political interference.
“We always believed that the incentives for bringing this case were questionable at best,” Gary Ginsberg, an executive vice president for Time Warner, said on Tuesday. “The court’s verdict resoundingly supported that view.”
Mr. Delrahim had argued that the only way antitrust concerns could be resolved was through the sale of major businesses. Last fall, he presented AT&T and Time Warner with two options: Sell the majority stake in either DirecTV, which is AT&T’s satellite television company, or Turner Broadcasting. The companies rejected both options.
Mr. Delrahim’s position, which the White House said it supported, also had the backing of some left-leaning politicians and antitrust experts. They have been increasingly calling for the government to break up Silicon Valley giants like Google, Facebook and Amazon and to prevent greater consolidation in health care, media, transportation and agriculture.
Judge Leon, who was appointed by President George W. Bush, tried to limit the reach of his opinion, writing that “the temptation by some to view this decision as being something more than a resolution of this specific case should be resisted by one and all!”
But many antitrust experts and analysts believe the decision will embolden companies to pursue deals.
The decision “will give AT&T market power to raise the price of Time Warner content, and, secondly, it will lead to further vertical mergers in this industry that will harm consumers,” said Steven Salop, an economics and law professor at Georgetown University who has pushed for stronger government regulation.
The trial drew large crowds that included executives, hedge fund managers and financial analysts. Mr. Delrahim attended occasionally, and so did Mr. Stephenson and Mr. Bewkes. The two executives each took the witness stand to defend the merger.
Judge Leon asked few questions during the trial and gave little indication of where he was leaning before his opinion on Tuesday. But many experts felt that the government had struggled to make its case.
After Judge Leon delivered his decision to a packed courtroom, representatives from AT&T and Time Warner lined the small hallway just outside. The men and women embraced and clapped one another on the back, beaming as they whispered congratulations.
“It’s a receiving line,” one woman joked, her hands outstretched for the next hug.
Cecilia Kang and Emily Cochrane reported from Washington, and Edmund Lee from New York.