AT&T chief financial officer John Stephens said the timing of the long-awaited approval of its $108.7 billion merger with Time Warner Inc., expected to occur before the end of the year, is “now uncertain.”
UPDATE (4:15 p.m.):AT&T’s Stephenson: 'No Intention' to Sell CNN
UPDATE (2:50 p.m.):Report Says Justice Wants Turner or DirecTV Sale as Condition for AT&T-Time Warner Approval
Time Warner shares dropped as much as 4.3% ($4.04 each) to $90.62 in early trading Wednesday. The stock was priced at $91.90 each later in the day, down 2.9% or $2.76 per share. AT&T shares were relatively stable, down 18 cents (0.5%) to $32.89 per share in early trading Wednesday.
Related: Time Warner Shares Plunge on Reports DOJ Will Block AT&T Deal
At the Wells Fargo Media & Telecom Conference in New York, Stephens said the telco is in “active discussions” with the Department of Justice, although he could not comment on the talks specifically.
“But with those discussions, I can now say that the timing of the closing of the deal is now uncertain,” Stephens said. “With regards to the transaction, everything continues as we’ve expressed in the past.”
AT&T has said previously that because the two companies have no competing businesses, there is little reason to consider the merger to be anti-competitive.
Related > What’s in a Name? Some (Non-Serious) Suggestions for Time Warner's New Moniker
AT&T first announced the Time Warner deal in October 2016. Because the merger is vertical – neither side has any overlapping businesses – it was expected to move through the regulatory approval process fairly easily. Even though President Donald Trump came out against the merger after it was announced during his campaign and though since becoming President has repeatedly battled with Time Warner’s CNN cable news network, most pundits expected the deal would be approved with little or no conditions.
But hints that the process was hitting a snag surfaced earlier this month when reports came out that the DOJ was considering filing a lawsuit to block the merger. It was uncertain at the time as to whether that meant the DOJ was seriously considering blocking the merger or was just keeping its options open. In recent years the agency has placed a greater emphasis on preparing for litigation in case talks break down.