Photographer: Michael Nagle/Bloomberg

Time Warner Drops as AT&T CFO Says Deal Timing Is Uncertain

Updated on
  • Continued discussions with Justice Department slow the process
  • Closing once expected last month may not happen this year

Time Warner Inc. fell after an AT&T Inc. executive hinted that their $85.4 billion merger may not close before yearend as talks with U.S. regulators continue.

The review of the deal, which is poised to make AT&T one of largest media giants in the world, is in late-stage talks. But the process has slowed as the Department of Justice’s new antitrust chief takes a hands-on role in the review, people familiar with the matter said last week.

“We are in active discussions with the DOJ,” AT&T Chief Financial Officer John Stephens at a Wells Fargo conference Wednesday. “I can’t comment on those discussions but with those discussions I can now say the timing of the closing of the deal is now uncertain.”

Shares of Time Warner fell as much as 3 percent to $91.80, and AT&T’s slipped 0.2 percent.

While the acquisition had been expected to win approval as soon as last month, AT&T 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, according to a filing last month.

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 hangups can’t be solved.

Antitrust concerns related to vertical tie-ups, or deals that don’t combine or eliminate industry competitors, 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.

— With assistance by David McLaughlin

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