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Last night around 7:30 p.m. ET, the Federal Trade Commission finally gave its blessing to the mega-merger between top Internet provider America Online (AOL – 46.85) and media giant Time Warner (TWX – 71.19), the parent of such entities as HBO television, Time Magazine
, and Warner Brothers studios.
The FTC's approval of the $108 billion transaction came with a few strings attached. Most notably, AOL must agree to make its Instant Messenger technology compatible with competing services. Also, the FTC noted that AT&T (T – 24) will likely have to sell its 25-percent stake in Time Warner Entertainment.
Reaction on the Street is muted, as the merger's approval was likely already factored into the shares. TWX is flat in late-morning trading while AOL has given up about half a point.
Options activity is subdued on TWX shares. On AOL, options players are trading the January 50 call. Nearly 7,000 contracts have already changed hands on this front-month position. Respectively speaking, however, this is nothing to write home about, as the strike boasted over 42,000 contracts in open interest heading into Friday's session.