AT&T confident will win approval for Time Warner deal
New York (AFP)
A&T expressed confidence Thursday that it will eventually win passage of its proposed $85 billion takeover of Time Warner after a report said US regulators were considering suing to block the deal.
The Justice Department is considering a lawsuit to prevent the megadeal, but has not made a final decision, the Wall Street Journal reported, citing people familiar with the matter.
The two sides are in settlement talks with the department that could allow some form of the deal to go through, but they are not close to an agreement, the report said.
Trading in shares of Time Warner was briefly suspended on the news, and the price was down 5.9 percent to $92.56 in midday trading. AT&T dropped 1.5 percent to $33.05.
The New York Stock Exchange occasionally halts trading of individual stocks in the event of sharp prices movements or in anticipation of major news announcements affecting the company.
But in a statement shortly after AT&T said it remained confident the deal would still go through.
An AT&T spokeswoman noted that the proposed deal is a "vertical" transaction that marries companies from different sectors instead of a case where both parties are direct competitors, which are typically approved.
"For over 40 years, vertical mergers like this one have always been approved because they benefit consumers without removing any competitors from the market," the AT&T spokeswoman said.
"While we won't comment on our discussions with DOJ, we see no reason in the law or the facts why this transaction should be an exception."
However, she added, "When the DOJ reviews any transaction, it is common and expected for both sides to prepare for all possible scenarios."
The Justice Department did not immediately respond to request for comment.
AT&T in October 2016 unveiled the proposed takeover of the parent company of Warner Bros. studios and TV assets such as HBO and CNN at a time when streaming services such as Netflix are eroding key revenue streams for cable television.
AT&T chief executive Randall Stephenson has argued the deal would provide consumers new lower-priced options and more autonomy in how they pick programming.
But those statements have drawn a skeptical response from some lawmakers in Washington, who have said the merger could concentrate too much power in the telecom giant, which might opt to squeeze out shows developed by other programmers.
A suit from the Department of Justice would not kill the AT&T-Time Warner transaction outright, but some companies in the past have chosen to withdraw mergers in the wake of regulatory opposition that drags on.
Halliburton in May 2016 scotched its proposed takeover of rival oil services company Baker Hughes in the face of repeat roadblocks from officials.
On the other side, Walgreens Boots Alliance in September announced it won regulatory approval to buy rival Rite Aid, but only after the deal was radically pared down in response to regulator concern.
© 2017 AFP