The telecommunication giant AT&T Inc. (NYSE:T) has announced that they are going to acquire Time Warner Inc in an $86 billion deal. It’s going to be one of the biggest deals this year, subject to approval from the regulators. The deal will combine content from the cable TV channels (CNN, Cartoon Network, and HBO) and film studios of Warner Brothers and the distribution network of AT&T.
The Chairman of AT&T says it is “a perfect match”, however, the critics have said that if it goes through, then too much media power will be concentrated in one hand. They are saying that it could lead to fewer consumer choices and higher pricing.
Randall Stephenson, who is AT&T’s Chief Executive, remains confident, though, saying that regulators are going to approve the merger.
US Lawmakers to Closely Look at the Deal
Lawmakers in the United States, including both the presidential candidates, have now questioned the deal. Next month, a senate subcommittee that looks after competition, is going to have a meeting where the deal will be discussed in length. Republican senator Mike Lee has already stated that the acquisition “potentially raise significant antitrust issues, which the subcommittee would carefully examine”. Mike is the chairperson of the antitrust subcommittee.
Hillary Clinton’s spokesman has commented that there are many concerns and questions about this deal. Regulators have to scrutinize it carefully before giving their approval. We still need to get more information before a conclusion can be reached, the person added. This is one issue that brings together both the candidates. Donald Trump, the Republican candidate too commented by saying, “Too much concentration of power in the hands of too few”.
Of course, whoever becomes the next United States President won’t have the final say. It might finally be decided by the US Justice Department that can block the deal, approve it, or impose conditions for the takeover to go through.
Critics Are Unhappy With the Acquisition
Critics like John Bergmayer of Public Knowledge, a group that stands for affordable media, has issued a warning saying the deal might not be good for consumers. He says AT&T (NYSE:T) may allow consumers to watch films and TV on mobile without any data caps, making video from others less attractive.
AT&T Chief Executive Randall Stephenson, however, assures everyone saying, “No competitive harm that is being rendered by putting these two companies together, so any concerns by the regulators, we believe, will be adequately addressed by conditions”.