President Donald Trump said he has not intervened in the Justice Department’s review of AT&T’s proposed $85 billion deal for Time Warner, but warned that the review could end up in court.
Trump told reporters that he “didn’t make that decision” and that the DOJ’s decision to push for divestitures in the AT&T-Time Warner deal was made by a “very, very respected person.” The person to whom Trump is referring could be the DOJ’s antitrust chief Makan Delrahim, who was appointed by Trump and confirmed in September.
While Trump said he did not influence the decision to push for the divestment of Turner Broadcasting—which raised suspicions due to Trump and CNN’s strained relationship—he did signal that litigation could be the outcome of the DOJ’s and AT&T’s current standoff.
According to Bloomberg, the DOJ has reportedly told AT&T to find a way to make the deal beneficial for it without being able to own CNN, TBS and other Turner networks. One scenario discussed would involve AT&T selling off Turner and then operating the spun-out company as a joint venture.
The new details that emerged over the weekend about the DOJ’s review of AT&T and Time Warner arrived after a busy week for the two companies, who are down to only the DOJ’s OK on their list of regulatory approvals needed to finalize the transaction.
Last week, AT&T expressed uncertainty about the timing for the closure of the deal amid reports that suggested the DOJ wanted AT&T and Time Warner to sell off CNN. Other reports suggested that AT&T CEO Randall Stephenson was the one who suggested a sale of CNN in order to meet conditions for approval, something which Stephenson vehemently denied in a statement.
“Until now, we’ve never commented on our discussions with the DOJ. But given DOJ’s statement this afternoon, it’s important to set the record straight. Throughout this process, I have never offered to sell CNN and have no intention of doing so.”
Although having the DOJ review proceed to court could certainly extend the timeframe for closure of the deal, analysts continue to believe AT&T would win the challenge.
“AT&T appears confident they can win vs. the DOJ in court and does not plan to offer any divestitures to the DOJ. With the high likelihood of proceeding to court (typically a 4-5 month process), the companies could no longer be confident in closing by year-end, let alone set a new timeframe,” said BTIG analyst Rich Greenfield in a research note.