U.S. Demands CNN Sale to Approve AT&T/Time Warner Deal: Sources
NEW YORK/WASHINGTON (Reuters) - The U.S. Department of Justice is pushing AT&T Inc (T.N) to sell Turner Broadcasting, parent of CNN cable network, or its DirecTV satellite television unit to satisfy antitrust concerns over its purchase of Time Warner Inc (TWX.N), sources told Reuters on Wednesday.
AT&T is prepared to fight any divestitures required to win regulatory approval of the $85.4 billion deal, according to sources familiar with the matter.
The development was a surprise to investors. Shares of Time Warner were down 6 percent at $89.00, while AT&T shares were down 0.2 percent at $33.15.
The Justice Department’s demand is likely to complicate its continuing antitrust conversations with AT&T, which said on Wednesday it was now uncertain when the deal, announced in October 2016, would be completed.
AT&T had previously said the acquisition would close by the end of this year.
The head of the Justice Department’s antitrust division, Makan Delrahim, may have changed his view of AT&T’s plan to buy Time Warner since giving an interview in 2016 where he declared it not “a major antitrust problem.” In an TV interview shortly after the deal was announced, when Delrahim was a law professor at Pepperdine University, Delrahim predicted it would get attention because of its size, but said he did not see it as “a major antitrust problem.”
Delrahim was subsequently nominated by U.S. President Donald Trump to head the Justice Department’s antitrust division and was confirmed in September. The Justice Department did not immediately respond to requests for comment on the matter. AT&T declined comment.
Trump, who has accused Time Warner’s CNN and other media of being unfair to him, criticized the deal on the campaign trail last year and vowed that as president his Justice Department would block it.