The proposed merger between AT&T Inc. (NYSE:T) and Time Warner Inc (NYSE:TWX) may sail through, after all, President Elect Donald Trump’s transition team having given assurances that they will treat the matter without prejudice. During the campaign, the proposed merger was thrown into disarray on Trump declaring he will seek to block it if elected, on grounds that the combined company would wield too much power.
AT&T-Time Warner $85 Billion Merger
A meeting between executives of the two companies and Trump’s transition team has reinvigorated hope of the deal sailing through, the team having indicated they will review the deal with an open mind. Trump’s stance on the proposed $85 billion deal also appears to have softened in the recent past especially with the appointment of officials with a hands-off record on antitrust enforcement.
“After talking with the president-elect’s team, AT&T executives are confident that their deal has a good chance of passing regulatory scrutiny, people informed about the conversation said,” Financial Times in a report.
Time Warner stock rallying by over 2% to highs of $94 a share is an indication of growing investor confidence that the deal will sail through. During the Internet, Media and Telecommunications Conference last month, AT&T sought to dispel any concern that the deal was in trouble.
Objections
The carrier remains confident of the deal sailing through because it will not be under the jurisdiction of the Federal Communications Commission after all. The only way that the FCC would have jurisdiction on the deal is if Time Warner transferred some of its broadcasts licenses to AT&T. While that is not expected to be the case, the companies remain confident of getting the much-needed green light from the Department of Justice.
Even on the wireless giant remaining confident that the deal sailing through, it still faces fierce opposition especially from consumer advocates. A point of concern is that the deal will give the carrier too much control of popular media outlets including CNN and HBO.
AT&T was up by 0.65% in Thursday trading session closing at highs of $38.88 a share.