AT&T and Time Warner came closer Saturday to announcing an $80 billion deal to combine the entertainment companies, but questions were already emerging over whether a bigger AT&T would be an entertainment colossus with too much power.
Republican presidential nominee Donald Trump said Saturday that his administration would block such an acquisition by AT&T if he is elected president.
The deal would turn communications giant AT&T, a company already valued at $230.6 billion, into the nation's largest entertainment company, surpassing Walt Disney Co. and Comcast, which owns NBCUniversal.
Just 15 months ago, AT&T became the nation's largest pay-TV company when it acquired DirecTV. Time Warner would give it HBO, CNN, TBS, TNT, Cartoon Network and Hollywood's biggest television and film studio, Warner Bros.
The Wall Street Journal reported that AT&T agreed to buy Time Warner for $105 to $110 a share in a cash-and-stock deal valued at about $80 billion. The boards of the two companies met Saturday to act on the deal.
The size of the proposed transaction has become an issue in the presidential campaign.
At a speech in Gettysburg, Pa., outlining his priorities for his first 100 days in office, Trump warned that buying Time Warner would give AT&T "too much concentration of power."
"We'll look at breaking this deal up," he said.
Such a big transaction would invite scrutiny from the U.S. Department of Justice and the Federal Communications Commission, experts said, though it probably would not be rejected outright.
Democratic presidential nominee Hillary Clinton has not commented on the reported deal in the works, but experts said regulators would probably scrutinize the acquisition regardless of who is elected.
"The potential for government antitrust policy to move left under a Clinton administration is a risk," said Paul Gallant, with Cowen Washington Policy Group, in a research note. "Still, we think approval of a deal, should one materialize, is more likely than not."
Should AT&T's acquisition go through, it would be much larger than Comcast's purchase more than six years ago of NBCUniversal, which gave Comcast distribution outlets and valuable media properties, including NBC, CNBC and Universal Studios. The FCC and the Justice Department consented to that deal with conditions.
This year, Charter Communications absorbed Time Warner Cable (which was separate from Time Warner), NBCUniversal bought Jeffrey Katzenberg's DreamWorks Animation for $3.8 billion, and movie studio Lionsgate is in the process of buying the Starz premium movie channel in a deal worth $4.4 billion, including debt.
CBS separately is considering whether to combine with Viacom, which owns Paramount Pictures, MTV, VH1 and Comedy Central. Both companies are controlled by Sumner Redstone and his family. Verizon invested in the youth-oriented YouTube network AwesomenessTV.
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(Noah Bierman contributed to this report.)
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