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UPDATE 10-U.S., AT&T at odds over CNN in Time Warner deal

UPDATE 10-U.S., AT&T at odds over CNN in Time Warner deal
From Reuters - November 8, 2017

NEW YORK/WASHINGTON (Reuters) - U.S. antitrust regulators and AT&T Inc sparred on Wednesday over whether the wireless carrier would be required to sell Time Warner Incs CNN cable network as a condition of approval of its deal to buy the media company.

The U.S. Department of Justice has demanded significant asset sales in order to approve the $85.4 billion deal, sources told Reuters on Wednesday, and asked AT&T to sell CNN-parent Turner Broadcasting or its DirecTV satellite TV operation in discussions on Monday.

AT&T offered to sell CNN, the sources said. AT&T denied that version of events of the meeting with Justice Department officials.

I have never offered to sell CNN and have no intention of doing so, AT&T Chief Executive Randall Stephenson, said in a statement on Wednesday. Stephenson is set to appear at an event in New York City on Thursday and will likely face questions about the deal.

Reports that the Justice Department is pushing for significant asset sales and conflicting reports of its discussions with AT&T cast new doubt on the deal on Wednesday. Shares of Time Warner closed down 6.5 percent at $88.50.

The dispute is the latest twist in a deal which took on broader political significance immediately after its inception in October 2016. U.S. President Donald Trump, a frequent critic of CNN, attacked the deal on the campaign trail last year, vowing that as president his Justice Department would block it. He has not commented on the transaction since taking office in January.

In a statement, White House spokesman Raj Shah said: The president did not speak with the attorney general about this matter, and no White House official was authorized to speak with the Department of Justice on this matter.

The head of the Justice Departments antitrust division, Makan Delrahim, said in a statement: I have never been instructed by the White House on this or any other transaction under review by the antitrust division.

AT&T wants to buy Time Warner, which owns the premium channel HBO and movie studio Warner Bros along with Turner Broadcasting, so it can bundle mobile service with video entertainment and take online advertising from Facebook Inc and Alphabet Inc.

Both companies have struggled to keep younger viewers from flocking to online services like Netflix Inc and Amazon.com Incs Prime Video.

CHANGE OF COURSE

Until recently the vertical deal - which in theory should not reduce competition among the two companies direct rivals - was considered by antitrust experts as likely to be approved with no major concessions.

But regulators desire for asset sales will complicate negotiations. AT&T said earlier on Wednesday it was now uncertain when the deal would be completed. It had previously said the acquisition would close by the end of this year.

TOO MUCH POWER

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