U.S. files suit to block US$85b AT&T-Time Warner merger


The U.S. Department of Justice will sue to block the long-awaited merger between AT&T Inc (NYSE: T) and Time Warner Inc (NYSE: TWX), Reuters reported Monday afternoon.

Audio will be available later today.

The deal announced more than a year ago would merge vast content of Time Warner units like premium cable channel HBO and news channel CNN with the massive internet and pay TV delivery networks of AT&T.

AT&T responded in a statement, calling the lawsuit "a radical and inexplicable departure from decades of antitrust precedent".

Time Warner's shares dropped 1.1 percent to close at $87.71, while AT&T shares closed up 0.4 percent at $34.64.

This follows a period filled with reports that the DOJ demanded AT&T and Time Warner sell Turner Broadcasting, which includes CNN.

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The Trump administration has had a strained relationship with the news network.

The No. 2 USA wireless carrier struck a deal in October 2016 to buy Time Warner, which also owns the premium channel HBO and movie studio Warner Bros, so it can bundle video entertainment on its mobile service. The officials said they flatly rejected the offer.

AT&T CEO Randall Stephenson said the idea his company would be too powerful after the deal "borders on the comical".

Although DOJ officials briefed on the matter said the White House was not involved in the decision or even told about the lawsuit ahead of time, critics are likely to raise questions about the possibility of political interference on the part of President Trump. He has not commented on the AT&T deal since his inauguration in January.

"This merger would greatly harm American consumers", Assistant Attorney General Makan Delrahim of the DOJ's antitrust division said in a statement.