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AT&T Resists DOJ Order To Divest Time Warner's CNN For Merger Approval

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AT&T Resists DOJ Order To Divest Time Warner's CNN For Merger Approval
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What Happened: AT&T Inc. (NYSE: T) is preparing to resist Justice Department orders to divest Time Warner Inc (NYSE: TWX)’s CNN at the risk of forfeiting approval for its $84.5 billion merger.

"AT&T has been told by the US Department of Justice that it needs to sell CNN" to get the acquisition approved, three people with direct knowledge of the negotiations told FT. AT&T rejected allegations that the news segment violates competitive regulations and is reportedly prepared to take the Trump Administration to court over the issue.

President Donald Trump has opposed the acquisition since it was first announced in 2016 and promised during his presidential campaign to block it.

What’s Next: As of last month, Time Warner and AT&T expected the deal to close by the end of the year. Now, they’re less confident.

"We are in active discussions with the DOJ,” AT&T CFO John Stephens said at a Wednesday investor conference. "Those are continuing on. I can't comment on those discussions, but with those discussions, I can now say that the timing of the closing of the deal is now uncertain.”

A spokesperson told Benzinga the company had no additional comment beyond Stephens' remarks.

The Stock’s Reaction: AT&T dropped 1 percent to $33.02 and Time Warner 1.3 percent to $89.32, and both were trending downward as of publication.

Update: “Until now, we’ve never commented on our discussions with the DOJ. But given DOJ’s statement this afternoon, it’s important to set the record straight," Stephenson said in a statement Wednesday afternoon. "Throughout this process, I have never offered to sell CNN and have no intention of doing so.”

Posted-In: DOJ Justice DepartmentNews Legal M&A Best of Benzinga

 

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