I am fairly certain that hostile takeovers to undermine a competitor are, in fact, illegal. However, it does happen from time to time without any sort of punishment.
As for the notion that cable is dying... well, they should have known this was coming. I remember years ago, it was speculated that streaming services, either as mega providers like Netflix or individual stations like Discovery, was going to become a thing. Time Warner was warned in advance. Everyone saw this coming. A lot of people made the suggestion that cable only service should be dissolved, and cable providers should voluntarily switch to a per channel streaming service. It was even pointed out that this would probably be cheaper to implement, since a lot of 'chaff' channels would be eliminated, and you could charge more for individual channels then you may get from packages.
The opportunity was there. They passed it up. Now, the only move they have left is the destruction of net neutrality and the dirtiest street fight moves available to corporations. Its unsurprising, really.