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With Tuesday night’s decision by the American voting public to elect Donald Trump as the 45th President of the U.S., AT&T’s $100 billion bid for Time Warner Inc. was put into jeopardy.
Shortly following the merger announcement in late October, Trump went public saying he would block the union as it would further concentrate big media influence, something he strongly opposes. “A deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said at a rally in October. Time Warner owns cable news network CNN, which often times found itself at odds with Trump during the campaigning process.Speaking at the Wells Fargo Technology, Media & Telecom Conference on November 9, AT&T Inc. Senior EVP and CFO John Stephens tried to remain positive amidst the Trump surprise, telling the audience that “We really look forward to working with President-elect Trump and his transition team. His policies and his discussions about infrastructure investment, economic development, and American innovation all fit right in with AT&T's goals.”
At the conference, a Wells Fargo analyst put the chance that the merger will get regulatory approval at just 35%, with the spread improving with the market. However, Stephens remains confident that the deal will go through, saying the following: “In our industry there is nothing that we can find on record of the DOJ ever denying one of these mergers. And quite frankly, there's good reason for that, because it brings consumer choice, brings innovation, and it will benefit consumers.”
As the AT&T-Time Warner acquisition aims to secure approval from federal regulators, note that the agreement includes a $500 million breakup fee if AT&T is not able to secure regulatory approval of the transaction.