Economy

AT&T says timing of Time Warner deal closing now uncertain

AT&T could be forced to sell off CNN or DirecTV if the Justice Department is to permit its purchase of Time Warner.

Reports say the Justice Department is pushing for significant asset sales and conflicting reports of its discussions with AT&T cast new doubt on the deal on Wednesday.

Accusing CNN of spreading "fake news", President Donald Trump has been at odds with the network since the 2016 election campaign, when he spoke out against the proposed merger of AT&T and Time Warner, Efe news reported.

The deal would transform the telecom company into a major media empire with control over CNN, HBO and Warner Bros studios as well as satellite cable provider Direct TV.

"DOJ bears the burden of proof in convincing a judge that the deal will substantially lessen competition", the Cowen report added. But Stephens did change the narrative somewhat, altering AT&T continued assurances that the deal would close before year's end to now account for uncertainty around the timeframe for finalizing the transaction.

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A further sticking point in discussions is the length of time that the United States government wants to impose conditions on what AT&T can and cannot do after a deal. "But the DOJ could prolong a lawsuit if it appeals a trial-court loss".

Most analysts had expected the deal to be approved. It would also mean that AT&T could now harness Time Warner's entertainment expertise.

Conflicting news reports about the role of CNN in the talks prompted AT&T chief executive Randall Stephenson to release a statement Wednesday afternoon, saying company officials have "never offered to sell CNN and have no intention of doing so".

But AT&T is said to be reluctant to sell assets, especially Turner, which represents a significant portion of Time Warner's profits.

"We may be on a collision course to litigation unless something changes", said Gene Kimmelman, a former antitrust official and the president of Public Knowledge, a consumer group.

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". During the presidential campaign, he argued that "deals like this destroy democracy" and cited it as "an example of the power structure" that he was fighting.



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