Here’s the biggest winner in the AT&T-Time Warner merger

One night in early February, workers removed the legendary Time Inc. name from its headquarters building in Manhattan and replaced it with the logo of Meredith Corp., its new owner. It was the end of the storied magazine publishing company founded by Henry Luce and his Yale classmate Briton Hadden in 1923, which lasted 95 years and defined the American Century.

As early as next week, its former parent company, Time Warner, may follow Time Inc. into oblivion as one of the pioneers in the era of merger mania gets swallowed by an even bigger fish.

Tuesday’s decision by Judge Richard Leon to allow AT&T












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 to acquire Time Warner












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 for $85.4 billion — without conditions — paves the way for the Dallas-based telecom giant to remake the news,  sports and entertainment company that features famous brands including CNN, HBO, and Warner Bros. Entertainment. Vanity Fair’s intrepid media writer Joe Pompeo reports that AT&T will rename Time Warner soon.  (Neither company would comment.)

Read: Why the AT&T-Time Warner merger could be bad news for consumers

The biggest winner of all will be Time Warner CEO Jeff Bewkes, whose patience during the 20 months since the deal was struck will be richly rewarded. Executive compensation and governance consultant Equilar Inc. estimates that Bewkes’ total exit package could top $434 million if his departure is treated as a termination rather than a retirement (see table).

Note: All figures based on Time Warner’s June 12th closing price of $96.20 Assumes Bewkes’ departure would is treated as a termination under a change in control, not a retirement.

Source: Equilar Inc., SEC filings

This platinum parachute could be the single richest severance package in dollar value in U.S. corporate history, besting that of Jack Welch, who cashed out with an estimated $417 million when he retired from GE in 2001. (When adjusted for inflation, Welch’s compensation would be much higher.)

Bewkes earned his pay by ruthlessly culling underperforming assets— spinning off Time Inc., the basket case AOL, and Time Warner Cable — and concentrating resources on more profitable, faster-growing brands including Turner Broadcasting, Warner Bros., and HBO. Those crown jewels attracted AT&T, a wireless, broadband and satellite TV provider that was now desperate for premium content to fill its pipeline.

In a statement that was uncharacteristically sharp and well-written for a federal court ruling, Judge Leon said the government “failed to carry its burden to show that the merger… is likely to ‘substantially . . . lessen competition.’” He dismissed out of hand the Justice Department’s argument the merger would cost AT&T customers hundreds of millions of dollars and explicitly warned the government not to petition the court for a stay of its decision, meaning the merger can proceed immediately. It was, in short, a humiliating defeat for the Justice Department’s Antitrust Division, which will no doubt think twice before trying to stop another big merger.

If Time Warner’s name disappears, it would be an ironic ending for a company that led the way during the merger mania of the 1980s and beyond.

Time Inc. merged with Warner Communications in 1990, in a deal engineered by Warner’s “Master of the Game” Steve Ross and a rising Time Inc. executive, Jerry Levin. After Ross died, Levin became CEO of the combined company and acquired Turner Broadcasting in 1996. As the millennium dawned, he engineered the capstone deal of the dot.com era, when America Online acquired Time Warner for $164 billion. That turned out to be the worst acquisition ever: The combined company took a loss of $99 billion in 2002, at the time the largest in corporate history.

Now the great merger monster itself is about to be absorbed in an even bigger deal. Live by the sword, die by the sword.

Howard R. Gold is a MarketWatch columnist and founder and editor of  GoldenEgg Investing , which offers exclusive market commentary and simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold.