Monday 16 September 2019

AT&T boss defiant over US government bid to block merger

AT&T chairman and CEO Randall Stephenson
AT&T chairman and CEO Randall Stephenson

Sara Forden, Scott Moritz and David McLaughlin

Defiant AT&T chief Randall Stephenson has told competition enforcers that the company will see them in court after the US Justice Department sued to block its $85.4bn bid to buy Time Warner.

The lawsuit "stretches the very idea of antitrust law beyond the breaking point", said Mr Stephenson at a briefing.

He left the door open for negotiations to find a way for the deal to pass federal muster - but reiterated that he wouldn't sell CNN to appease Washington, whether the deal was influenced by President Donald Trump or not.

AT&T's attorney, Daniel Petrocelli, said the company is prepared to go to trial in as few as 60 days.

It would then be up to a judge to determine whether the combination of AT&T and Time Warner would give the new entity too much power in the fast-changing media landscape, as Makan Delrahim, the new head of the Justice Department's antitrust division, contends.

If the matter goes to court, AT&T will surely press for a decision before April 22, the date before which the two companies can walk away without penalty, said Jonathan Chaplin, an analyst with New Street Research. "AT&T is certainly willing to fight this."

The legal challenge - the first major antitrust enforcement action to be brought by the Trump administration - dealt a blow to a tie-up that appeared to be sailing toward approval as recently as a month ago.

That was before Mr Delrahim was appointed to his post.

"This merger would greatly harm American consumers," he said. "It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy."

Mr Delrahim had pushed for a sale of either Time Warner's Turner Broadcasting division, which owns cable channels including CNN, TNT and Turner Sports, or DirecTV, the satellite provider AT&T bought in 2015. The parties continued to talk as recently as last week.

Mr Stephenson said he was surprised at the turn of events.

"When we announced this deal, the best legal minds in the country agreed that this transaction would be approved since our companies don't even compete with each other," he said. The Justice Department's action "defies logic and is unprecedented".

The CEO briefly addressed what he called "the elephant in the room" - whether the lawsuit had anything to do with President Trump's very public and intense dislike of CNN. "Frankly, I don't know," he said. "But nobody should be surprised that the question keeps coming up, because we've witnessed such an abrupt change in the application of antitrust law here."

In the event of a trial, AT&T intends to seek court permission to access communications between the White House and the Justice Department about the takeover. (Bloomberg)

Irish Independent

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