Date
25 November 2017
AT&T-Time Warner deal would be a classic 'vertical' merger that won't remove any competitors from the market, argues AT&T CEO Randall Stephenson. Photo: Bloomberg
AT&T-Time Warner deal would be a classic 'vertical' merger that won't remove any competitors from the market, argues AT&T CEO Randall Stephenson. Photo: Bloomberg

AT&T prepared to litigate over Time Warner deal, says CEO

AT&T is prepared to go to court if the US Justice Department rejects the company’s planned merger with Time Warner, the telecom giant’s chief executive said on Thursday.

Randall Stephenson also insisted that AT&T will not sell cable network CNN to win antitrust approval for the Time Warner deal, Reuters reports.

“If we feel like litigation is a better outcome then we will litigate,” Stephenson was quoted as saying at the New York Times DealBook conference in New York City.

AT&T had been ready to go to court the day the deal was announced in October 2016, he said.

The comments came after reports that Justice Department staff have recommended that AT&T sell either its DirecTV unit or Time Warner’s Turner Broadcasting unit, which includes news company CNN, as a condition for approval of the merger deal.

According to a Reuters source, officials had raised objections, arguing that a combined company would raise costs for rival entertainment distributors and stifle innovation.

The two sides are still in talks over approval of the deal but have disagreed over the necessity of asset sales.

AT&T has signaled it would not agree to sell DirecTV, which it acquired for US$49 billion in 2015, leaving CNN and other cable TV assets as the main sticking point in negotiations.

The antitrust regulator is worried the combined company could make it harder for rivals to deliver content to consumers using new technologies.

Stephenson said the deal was a classic “vertical” merger that removed no competitors from any market and denied the company would be too powerful.

The Justice Department’s desire for asset sales, which normally would not be required in a merger between companies that are not direct competitors, has raised concerns about political influence on the deal, given US President Donald Trump’s frequent criticism of CNN, Reuters noted.

During the election campaign last year, Trump vowed to block the deal shortly after it was announced, but has not addressed the issue publicly as president.

Stephenson said on Thursday that he has no reason to think Trump would be a factor in the deal’s approval, and added that he hopes the matter will be settled well before the April 22, 2018 deadline when parties can walk away from a deal.

The head of the Justice Department’s antitrust division, Makan Delrahim, said in a statement late on Thursday that he has “never been instructed by the White House” on the AT&T deal.

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RC

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