AT&T Welcomes Trump With $85B Time Warner Deal on the Table
AT&T (NYSE:T) and Time Warner (NYSE:TWX) executives were pretty enthusiastic when they announced their $85 billion mega media deal last month. The challenge then was selling it to investors. The challenge now is to convince skeptical president-elect Donald Trump that it should prevail.
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“We look forward to working with president-elect Trump and his transition team,” said AT&T CFO John Stephens Wednesday while speaking to investors at a Wells Fargo (NYSE:WFC) conference. He added: “We’ve been the leading investor in this country for the last five years running and our Time Warner transaction is all about innovation, economic development, consumer choice and investment in infrastructure…”Ironically, Trump, who authored the best-selling business book with Tony Schwartz, “Trump: Art of the Deal,” doesn’t like this one despite having largely pro-business economic policies.
“AT&T is buying Time Warner, a deal that we will not approve,” he said during a speech last month in Gettysburg, PA. “It is too much concentration of power in the hands of too few,” he added.
Despite Trump’s gift of gab on the campaign trail, investors are taking those remarks more seriously after Tuesday night’s historic presidential election win. Shares of Time Warner fell on Wednesday, while shares of AT&T were trading higher.
The architects of the combo don’t share Trump’s view of the deal: They see it as more of a necessity so they don’t get left behind.
“We want to be at the front of it. We don't want to be chasing it," said AT&T CEO Randall Stephenson while describing the deal to investors on the day it was announced, as reported previously by FOXBusiness.com. He also highlighted the media industry’s rapid race to deliver content across all screens, most importantly mobile.
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Morphing into a modern-day platform is a win-win, boasted Time Warner CEO Jeff Bewkes that same day. “The benefit for consumers is good, for advertisers it is terrific.”
The combination, which is expected to close in the second half of 2017, will enable the companies to give consumers – potentially 144 million worldwide mobile subscribers – more of the content they want vs. what they don’t. Time Warner owns marquee content including HBO's hit 'Game of Thrones'.
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Donald Trump's victory speech AT&T Purchase of Time Warner Likely to Face FCC Review Time Warner's Embarrassment of Riches Key to AT&T's $85B Deal Fmr. FCC commissioner on the AT&T, Time Warner deal The Senate Judiciary Subcommittee on Antitrust plans to hold a hearing on the deal, and Senator Mike Lee’s (R-UT) office tells FOXBusiness.com it will likely take place in December, not November, as previously floated. As for Trump, he is expected to hit the ground running as he plans out his first 100 days in office. His top priorities include taxes, term limits and regulation, according to a recent speech. Some argue he may soften his tough tone used during much of the campaign. Also, as Stephens noted, AT&T has been the leading investor in the U.S., to the tune of $140 billion for wireless and wireline networks, among other areas of infrastructure. That may appeal to the business mogul and his economic team who will strive to fulfill his mandate to "Make America Great Again." Suzanne O’Halloran is Managing Editor of FOXBusiness.com and a graduate of Boston College. Follow her on @suzohalloran.