The US Justice Department says it will appeal a federal judge's approval of AT&T Inc's $US85.4 billion ($A114 billion) acquisition of Time Warner, raising the prospect barely a month after the deal closed that it could be undone.
AT&T was sued by the Justice Department on antitrust grounds, saying that the deal would harm consumers, but US District Judge Richard Leon last month approved the deal, allowing it to move forward following a lengthy trial. The merger, first announced in October 2016, was also opposed by US President Donald Trump.
Leon ruled that the tie-up between AT&T's wireless and satellite businesses with Time Warner's movies and television shows was legal under antitrust law.
AT&T general counsel David McAtee said the company is "surprised" the Justice Department is appealing.
"We are ready to defend the court's decision at the D.C. Circuit Court of Appeals," McAtee said in a statement.
"The court's decision could hardly have been more thorough, fact-based, and well-reasoned."
A Justice Department spokesman declined to comment.
AT&T shares fell 1 per cent after the bell.
The Justice Department opted in June not to seek an immediate stay of the court's approval of the merger, allowing the merger to close on June 14, though the Justice Department still had 60 days to appeal the decision approving the merger.
The government's notice of appeal filed in US District Court in Washington did not disclose on what grounds it intends to challenge the approval.
Leon had sharply urged the Justice Department not to seek a stay of his ruling, saying that it would be "manifestly unjust" to do so and not likely to succeed. In his ruling, he said the government had failed to show competitive harm.
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