Photographer: Patrick T. Fallon/Bloomberg

AT&T-Time Warner Review Slows After Antitrust Chief Joins In

  • DOJ’s Delrahim is said to be sorting out competitive remedy
  • Optimistic predictions for October close have come and gone

AT&T Inc.’s late-stage talks with U.S. officials over the company’s $85.4 billion takeover of Time Warner Inc. are dragging on as the Justice Department’s new antitrust chief takes a hands-on role in the review, according to people familiar with the matter.

Makan Delrahim, the head of the antitrust division, is working to resolve concerns that combining AT&T’s vast telecom network with Time Warner’s movies and TV shows could hurt competition, said the people, who asked not to be identified because the deliberations aren’t public. Delrahim joined the process late because he was confirmed by the Senate in September. He has been meeting with parties involved to remedy the competitive issues but would file a lawsuit to block the deal if antitrust concerns can’t be solved.

While the deal had been expected to win approval as soon as last month, AT&T last week extended the termination date of the merger agreement “for a short period of time” while the review continues. The two companies had originally scheduled the agreement to last until Oct. 22, 2017.

The discussions between the parties were described by multiple people involved in the process as normal for an antitrust review of a big, complex merger. The Justice Department often pursues parallel paths in deals that raise significant concerns, seeking a settlement with companies while at the same time preparing for litigation if a deal can’t be reached. Companies can resolve merger lawsuits even after a complaint has been filed.

Representatives for AT&T, Time Warner and the Justice Department declined to comment about the review.

AT&T said in a regulatory filing Friday the deal is expected to close by year-end. The Wall Street Journal said on Nov. 2 that the company and the Justice Department weren’t close to an accord and that the department was preparing for litigation in case they don’t reach a settlement, sending Time Warner shares down 3.8 percent.

Possible Remedies

Makan Delrahim
Photographer: Mark Wilson/Getty Images


Delrahim took over the review after months of investigation by the staff attorneys and economists at the antitrust division. While negotiations with the companies have focused on conduct remedies, Delrahim may explore asset sales to address competitive harm, according to one of the people.

If approved, the deal would reshape the media landscape by uniting the biggest pay-TV distributor with the owner of CNN, Warner Bros., TNT, TBS and HBO. It will be the Justice Department’s first major antitrust review concluded under President Donald Trump, who as a candidate criticized the tie-up for combining too much power in one company.

The deal received approval last month from Cade, Brazil’s antitrust regulator, under the condition that AT&T keep its Sky Brazil operations separate from Time Warner. The merger is still awaiting a decision from Brazil’s telecommunications regulators. AT&T has gotten OK’d by every other country with the exception of the U.S.

Rare Step

U.S. antitrust officials, who have blocked many tie-ups between direct competitors, rarely step in to stop vertical deals like this one, which unites a supplier and distributor of video programming. Still, opposition to such takeovers isn’t unheard of. Last year, Lam Research Corp. and KLA-Tencor Corp. abandoned their merger in the face of objections from the Justice Department.

Antitrust concerns in vertical tie-ups are typically resolved through so-called conduct remedies. That occurred in Comcast’s Corp.’s purchase of NBCUniversal, which regulators approved in 2011 with conditions aimed at preventing the cable giant from thwarting online rivals like Netflix Inc.

Delrahim, however, has signaled he isn’t always a fan of settlements that force the Justice Department into ongoing monitoring of companies’ behavior.

“I view my role as a law enforcer, not a regulator through consents,” he said last week in remarks at New York University. “You either violate the law or you don’t.”

— With assistance by Sara Forden, Gerry Smith, and Liz Crampton

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