AT&T's Time Warner Merger Could Force It To Sell CNN

AT&T's Time Warner Merger Could Force It To Sell CNN

"I have never offered to sell CNN and have no intention of doing so", AT&T CEO Randall Stephenson stated.

The Justice Department has the power to approve mergers with or without conditions. But AT&T has said it doesn't want to lose the all-news network in the deal.

Time Warner shares fell 6.3 percent at 2:54 p.m.to $88.68, compared with the $107.50 offer price.

The dispute is the latest twist in a deal which took on broader political significance immediately after its inception in October 2016. He has not commented on the transaction since taking office in January.

"The Department is committed to carrying out its duties in accordance with the laws and the facts", an unnamed department spokesman said, according to CNBC.

DOJ is demanding the sale of Time Warner's Turner Broadcasting, which includes CNN as well as networks like TBS and TNT, one of the sources said - adding that it's clear the real sticking point is CNN, a frequent target of President Donald Trump's anger.

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But regulators' desire for asset sales will complicate negotiations.

Until today, AT&T expressed confidence that it would wrap up the acquisition by the end of this year.

The discussion of a potential sale of CNN has politicised the situation.

The network has been a favorite target for Trump, who has called it "fake news" because of its coverage of his presidential campaign and administration. However, AT&T denied that selling CNN was under consideration. "Any indication that this administration is using its power to weaken media organisations it doesn't like would be a profoundly disturbing development".

Time Warner, CNN's parent company, is trying to merge with the cell phone provider in an $85 billion deal.

AT&T is ramping up preparations to fight the Justice Department in court if it comes to that, according to some of the people.

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AT&T's response to all of those demands would likely be to file a lawsuit against the government, many reports have indicated.

But on Wednesday, AT&T chief financial officer John Stephens said at an investor conference that there is now "uncertainty" about when the deal will close.

US President Donald Trump has criticized both CNN and the mega-deal on many occasions in the past.

"Until now, we've never commented on our discussions with the DOJ", Stephenson said in a statement.

"With a rate of 20% combined with provisions for full expensing of capital expenditures for the next five years, we're prepared to increase our investment in the United States".

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