President-elect Donald Trump is still opposing the merger between Time Warner Inc and AT&T. He believes that the merger would concentrate much power in the media industry, but Trump has been publicly silent about the mega-merger. It is rumored that the President-elect told his inner circle that he considers the merger decision to be bad. Reports say that chief strategist of Donald Trump, Steve Bannon, also opposes the deal.
During the election campaigns, Trump blasted the deal and shares of Time Warner climbed ten percent on speculation that the Trump Administration would be friendly to the 85.4 billion merger. However, after Bloomberg reported on what Trump thinks about the deal, the shares of Time Warner dropped as much as 3.8 percent.
Hope Hicks, who is the spokeswoman for Trump, did not respond to the rumors, and both Time Warner and AT&T also declined to comment. Nevertheless, Cowen & Co. analyst Paul Gallant feels that the opposition of Trump to the deal is a bit negative. He said that everything is negotiable with the President-elect and added that the review process is still in the very early stages.
It is not yet clear if Trump will try to influence the regulatory review of the merger. He can either push the officials to put forward the conditions or block the deal completely. If the deal is made, it will combine the biggest pay television and internet service provider in the US with the largest creator of programming, but the deal will be reviewed by the Justice Department and most probably by the Federal Communications Commission.
Trump will take the President’s office on Jan 20 and has nominated Senator Jeff Sessions to lead the Department of Justice. He has not yet suggested a successor for the departing FCC Chairman Tom Wheeler though. In October, before the presidential selection, Trump said that his Administration wouldn’t approve the merger, saying, “It’s too much concentration of power in the hands of too few.” He cited the deal as “an example of the power structure I’m fighting.”
If Trump wishes to influence the review, he may have more success with FCC as they weigh deals on public interest standard, said analyst Craig Moffett. “If the FCC takes the case, President Trump could influence the decision in any number of ways,” Moffett said. “He can effectively turn up the heat and make it very difficult for the FCC to disagree with him.”