DOJ said AT&T/Time Warner merger needs CNN sale

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Unidentified sources told media outlets the Justice Department is pushing AT&T to offload certain assets for sale for the deal to be approved.

The Department of Justice wants AT&T to unload CNN before it can complete its $84.5 billion acquisition of Time Warner, according to a report Wednesday.

AT&T's chairman and CEO Randall Stephenson said in a statement Wednesday that he wanted to "set the record straight".

The Justice Department has a different account. That news was viewed, by advisors on the deal, as a warning shot over negotiations. Instead, AT&T would fight the DoJ ruling through the courts.

The companies had been planning to finalize the deal by the end of the year, and just last week AT&T said it was confident it would win approval for the deal since it does not involve direct competitors.

As president, Trump has often blasted CNN for its coverage of him and his administration, disparaging it and its reporters as "fake news".

"The Department is committed to carrying out its duties in accordance with the laws and the facts", an unnamed department spokesman said, according to CNBC.

The Justice Department's new antitrust chief, Makan Delrahim, has said he prefers "structural" changes to a deal, like selling off assets, rather than having the government monitor a company's promises to abide by certain conditions, as was done with Comcast. At a meeting on Monday, the DOJ told AT&T executives that either Turner or DirecTV had to go, which AT&T executives said was a non-starter, this person said.

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Shares of Time Warner closed down 6.5 per cent at $88.50.

"None of this rules out a political motive but if the story weren't reported as "divest CNN" it would be easier to have an intelligent discussion", he said.

The legality of the Justice Department's ability to pressure AT&T about CNN is unclear and would likely lead to lawsuits.

On Sunday, Kellyanne Conway said that the Trump administration is not interfering with the Justice Department's review of the deal.

Time Warner shares have dropped 6% to $88.91, while AT&T's have managed a almost 1% gain, to $33.33.

The deal is opposed by an array of consumer groups and smaller television networks on the grounds that it would give AT&T too much power over the content it would distribute to its wireless customers.

From the campaign trail, Trump criticized the deal, saying that he would reject it because it concentrated media power.

"Until now, we've never commented on our discussions with the DOJ", Stephenson said in a statement.

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