AT&T will face major regulatory hurdle to secure deal for Time Warner
24 October 2016
US telecoms giant AT&T will have to overcome a major regulatory hurdle if it is to secure a multibillion-dollar deal to snap up media and entertainment firm Time Warner.
The 85.4 billion US dollar (£70 billion) takeover would bring together AT&T's 130 million mobile phone customers and 25 million pay-TV subscribers with content from Time Warner's cable TV channels and Warner Bros film studios.
If approved, AT&T would gain control of cable channels HBO and CNN, as well as a raft of popular shows, including Game Of Thrones, The Wire, The Sopranos and Sex And The City.
However, the proposed deal has raised concerns amongst US presidential candidates Hillary Clinton and Donald Trump, while the US Senate antitrust subcommittee will meet in November to discuss whether the tie-up hands too much power to one corporation.
The potential deal - the biggest seen either side of the Atlantic this year - would make AT&T the first mobile phone network provider to compete with cable TV companies in the US by offering bundled mobile, broadband and video.
Randall Stephenson, AT&T chairman and chief executive, said: “Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen.
“We’ll have the world’s best premium content with the networks to deliver it to every screen.
“A big customer pain point is paying for content once but not being able to access it on any device, anywhere.
“Our goal is to solve that. We intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications.”
AT&T said the deal would save one billion US dollars (£817 million) within three years of the takeover being completed.
Mr Trump, the Republican nominee, said he would block the deal if he was elected president.
A spokesman for Mrs Clinton, the democratic candidate, said there was a lot of information which needed to come out before any conclusions could be reached.
However, the US Justice Department, not the president, has the power to either approve the deal or stop it in its tracks.
Senator Mike Lee, chairman of the US Senate antitrust subcommittee, said the takeover may “potentially raise significant antitrust issues, which the subcommittee would carefully examine”.
The tie-up would make Time Warner the target of the two largest media-company acquisitions on record, according to Dealogic.
The highest was AOL’s disastrous 94 billion US dollar (£77 billion) proposed acquisition of Time Warner at the end of the dot-com boom.