Published: Fri, November 10, 2017
Economy | By Melissa Porter

Stephenson Set to Go Court To Fight TW Asset Sale Demands

Still, antitrust experts have said that on a strictly legal basis, fighting the deal might be hard for the DOJ.

The U.S. Department of Justice declined to comment on any of the proceedings.

But the idea of a suit to block the merger has clearly raised concerns for Time Warner and specifically CNN, which is owned by the company.

Some sources said Stephenson floated the possibility of selling CNN or other assets. AT&T can deliver this video over the internet, including its cellular network.

Politicians have voiced concerns about the AT&T-Time Warner union for months.

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

"That clip could be used by any attorney, by AT&T, to say, 'Hey, look, you can see what was in his mind even before he was president of the United States, even before he knew what the merger looked look".

But some Justice Department officials claimed that AT&T CEO Randall Stephenson had offered to sell CNN to get the seal of approval. AT&T wasn't interested in doing so. It has been waiting for the Justice Department's blessing.

The Justice Department is supposed to make merger reviews based exclusively on antitrust law.

Among other comments, Stephenson said that a divestiture of CNN "makes no sense", and mentioned that his company is prepared to litigate if any such formal demand is made. Trump's hand-picked antitrust chief, Makan Delrahim, said he has "never been instructed by the White House on this or any other transaction under review by the antitrust division". The Wall Street Journal reported that the DOJ's decision could still go either way but that the agency and the companies were still not close to an agreement on deal conditions.

But even the perception of White House involvement could influence the deal-review process.

Trump has a notoriously contentious relationship with CNN, which he often takes to task for "fake news". "For me it would be virtually impossible to not take that into account".

Speaking of the merger at a conference, AT&T's CFO, John Stephens stated that combining the companies would lead to "all kind of benefits".

"I have never been told that the price of getting the deal done was selling CNN".

It's also unlikely AT&T will agree to sell or spin off DirecTV, Barclays analysts wrote Thursday. He said that AT&T would seek an expedited hearing in that case. He also pointed out that the government had not blocked this kind of tie-up in decades.

Until just recently, this deal was considered vertical, which should not in theory reduce the competition amongst the direct rivals of the two, and was considered by experts in antitrust to be approved without any major concessions. In such deals, a competitor isn't eliminated, so it's harder for the government to show how consumers would be harmed. If that happens, AT&T is expected to fight it in the courts.

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