AT&T’s Chief Financial Officer Doubtful About When the Time Warner Deal Will Close
Structural remedies, which generally involve the sale of assets, represent a greater hurdle for AT&T than merely meeting conditions on what the company can and cannot do after the deal.
The Justice Department’s demand may complicate its continuing conversations with AT&T, which said on Wednesday it was now uncertain when the deal would be completed.
Previously, AT&T had said the $85.4 billion acquisition, announced in October 2016, would close by the end of this year.
Shares of Time Warner fell 2.6% to $92.18 in early trading while AT&T was down 0.2% to $33.01.
The Justice Department and AT&T did not immediately respond to requests for comment.
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The deal is opposed by an array of consumer groups and smaller television networks on the grounds that it would give AT&T too much power over the content it would distribute to its wireless customers. Time Warner owns cable channels such as HBO and CNN as well as film studio Warner Bros.
U.S. President Donald 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.
“All approvals have been received but for the DOJ,” AT&T’s Chief Financial Officer John Stephens told a conference in New York.
“We are in active discussions with the DOJ. I cannot comment on those discussions,” he said. “But with those discussions I can now say that the timing of the closing of the deal is now uncertain.”
Stephens’ comments signal to investors that the Justice Department could sue to block or revise the merger and the company would fight in court to try to win approval, a person briefed on the matter told Reuters.
Another sticking point in discussions is the length of time that the U.S. government wants to impose conditions on what AT&T can and cannot do. Two people briefed on the talks told Reuters the government has sought as long as 10 years for such conditions while AT&T has pressed for a shorter period.