Economy

AT&T Clashes With US Over Time Warner Asset Sales

AT&T Clashes With US Over Time Warner Asset Sales”

United States authorities have told AT&T and Time Warner they must sell the CNN news channel or satellite operator DirecTV to get the green light for their merger, a source close to the deal told AFP on Wednesday.

On last Sunday's "Reliable Sources" on CNN, when asked whether Trump has had any involvement, counselor to the president Kellyanne Conway said "we're not going to interfere with that here".

AT&T's chairman and CEO Randall Stephenson said in a statement Wednesday that he wanted to "set the record straight".

It's possible that the Justice Department is simply using the threats of forcing a divestiture as a bargaining tactic, Hay told Yahoo Finance.

Today's news comes, just hours after it merged in the United Kingdom of Sky News facing closure to avoid scuppering up the 21st Century Fox merger with Sky.

In an interview previous year, Makan Delrahim - now the newly-appointed head of DOJ's antitrust unit - said that the merger did not pose an antitrust issue.

At an investors conference Wednesday, AT&T Chief Financial Officer John Stephens said he could not comment on discussions with Justice, which he described as ongoing.

But neither is the prospect of a duopoly governed by AT&T-CNN and Comcast-MSNBC, even if Trump-friendly Fox News might end up getting the short end of the stick.

Both companies have called the proposed deal a "vertical merger". Time Warner shares fell 6.5 percent during afternoon trading, while AT&T flatlined.

Stephens once again emphasized that AT&T plans to run Time Warner "as a separate subsidiary" and said it was excited given "how well they are doing".

One person said AT&T offered to sell CNN, a proposal the government rejected, while another person said the Justice Department brought up the idea of divesting either DirecTV, the satellite provider, or Turner Broadcasting, which includes CNN, TNT and TBS. According to multiple reports, the administration wants Time Warner to dump CNN before the merger goes through.

The surprise stemmed in part from comments past year from the head of the Justice Department's antitrust division, Makan Delrahim, who said in a TV interview shortly after the deal was announced that he did not view AT&T's plan to buy Time Warner as "a major antitrust problem".

Trump recently appointed Makan Delrahim to head the anti-trust division at the Justice Department.

But AT&T chief Stephenson said the combined company would "give customers unmatched choice, quality, value and experiences that will define the future of media and communications". The stock has a market cap of $70.60 billion, a PE ratio of 16.29 and a beta of 1.08.

President Trump regularly blasts CNN as "fake news", often tweeting his displeasure with the network's coverage of his presidency. "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".

President Donald Trump has long slammed CNN for what he says is bias against him and his administration, charging during the campaign that "deals like this destroy democracy", the Times reports.



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