AT&T and U.S. Regulators at Odds Over Deal for Time Warner

Antitrust regulators in the U.S. and AT&T held tense discussions on Wednesday over whether the second largest wireless carrier in the U.S. would have to sell CNN a Timer Warner cable network as one of the conditions of receiving approval of its takeover bid for the media company.

The U.S. Justice Department had demanded substantial sales of assets in order to grant approval of the deal worth $85.4 billion, said sources close to the matter, and has asked AT&T to sell Turner Broadcasting, the parent company of CNN or DirecTV its satellite TV business during discussions Monday.

Sources said that AT&T had offered to sell CNN, but that has been denied by AT&T.

CEO of AT&T Randall Stephenson has said he never told antitrust regulators he would sell CNN. He is scheduled to appear in New York City at an event Thursday and likely will be facing questions related to this deal.

Reports the DOJ is pushing for substantial liquidation of assets and conflicting in its talks with AT&T have cast more doubt on the deal being completed. Time Warner shares were down Wednesday by 6.5%.

This dispute is another twist in the deal that took on political significance just after being announced in October of 2016, when President Donald Trump, at the time the GOP presidential nominee and frequent CNN critic, attacked it while campaigning vowing that as the U.S. president his DOJ would block the deal. Since he took office during January, Trump has not made any further comment about the deal.

Raj Shah a spokesperson for the White House said in a prepared statement that the president had not spoken about the matter with the attorney general and that no official from the White House was authorized to speak with the DOJ on the matter.

Makan Delrahim the antitrust division head of the DOJ said the White House never instructed the agency on this matter or any other under review by my division.

AT&T wants to purchase Time Warner, which is the owner of HBO, Warner Bros movie studio and Turner Broadcasting, in order to bundle its mobile service with video and take away online advertising from Alphabet and Facebook.

Both companies are struggling trying to keep their younger viewers from cutting the cord and shifting to online offerings such as Prime Video by Amazon and Netflix.

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.

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