US Demands CNN or DirecTV Sale to Approve AT&T/Time Warner Deal

09 November, 2017, 01:55 | Author: Lora Ball
  • Korea Investment CORP Cuts Position in Time Warner Inc. (NYSE:TWX)

They are looking at questions such as whether AT&T could raise prices for Time Warner content for other companies - higher costs that could eventually trickle down to consumers. Waldron LP grew its stake in shares of Time Warner by 137.7% during the first quarter.

"But with those discussions, I can now say that the timing of the closing of the deal is now uncertain", Stephens said.

The reports effectively confirmed last week's Wall Street Journal report that the government is "actively considering" an antitrust lawsuit to block the impending acquisition.

The New York Times and the Financial Times also reported Wednesday afternoon that the DOJ was demanding the sale of CNN or Turner as a condition of approving the deal. A Justice Department representative declined to comment. At a meeting on Monday, the DOJ told AT&T executives that either Turner or DirecTV had to go, which AT&T executives said was a non-starter, this person said.

To win approval of the deal, AT&T hired lobbyists close to Vice President Mike Pence and others in the Trump administration.

The Trump administration is threatening to scuttle AT&T's $85.4bn takeover of Time Warner's media assets unless the company sells off the parent unit of CNN or the satellite operator DirecTV, according to reports.

(As Reuters noted, "structural remedies" is anti-trust jargon for getting rid of assets.) The news came shortly after AT&T Chief Financial Officer John Stephens told the audience at a Wells Fargo conference in New York, "We are in active discussions with the D.O.J".

AT&T announced its acquisition of Time Warner more than a year ago.

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As a candidate, Trump vowed to block the deal because it concentrated too much "power in the hands of too few".

The limitation, of course, on theoretically legitimate reasons for holding up the merger is that for purposes of chilling First Amendment rights, you simply need to create the fear that criticizing the president will have big-league business consequences. "This is political, this is unprecedented, and the only explanation is political pressure from the White House", a CNN employee told me.

"By immediately lowering the corporate tax rate to 20 percent, this bill will stimulate investment, job creation and economic growth in the United States", said Randall Stephenson, AT&T chief executive.

AT&T has long noted that "vertical mergers" - when one company buys another that isn't a direct competitor - are typically approved. In that case, the Justice Department and Federal Communications Commission attached several conditions to Comcast's business practices, including promises that Comcast would not withhold content from rival streaming services.

The channel has been targeted by US President, Donald Trump and branded "fake news" on a number of occasions. "With regards to the transaction, everything continues as we've expressed in the past".

Separately, Mr. Trump has criticized the proposed merger from a populist perspective.

It's not clear what DOJ statement Stephenson was referring to.

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