An AT&T and Time Warner merger is still not a certainty, but signs are that it will likely go ahead. It still needs Justice Department approval and President Trump may still intervene. However, analysts believe it will go ahead.
This view is supported by Time Warner’s stock price edging ever closer to the $107.50 per share offered by AT&T. Shares opened Friday at $99.27 and closed at $99.79. This represents a 3.38% jump for the year to date. It is also a 19.78% increase since Oct 21st, the day before the deals was announced.
These figures indicate that the market expects the deal to go through. This is in spite of Donald Trump’s antipathy towards it. The president has had issues with CNN, Time Warner’s news division, claiming it publishes “fake news.” AT&T has stated that the wireless and DirecTV satellite business would operate separately from the Time Warner media assets.
Once the deal goes through, AT&T management would control the merged operations. It seems likely that the current AT&T chief strategy officer, John Donovan, would be responsible for the wireless business. The media division would be run by the current DirecTV and entertainment businesses executive, John Stankey. AT&T CEO, Randall Stephenson, will oversee the entire operation, assuming the deal is approved.
It is highly likely that the deal will be completed. In fact, it could be a done deal by the end of this year. The only uncertainty is whether or not the White House would get involved. Last month, the Justice Dept. was urged by a group of senators to give the potential merger close scrutiny. A merger would need Justice Department approval, and also a few international approvals. It is not, however, a hostile takeover, and most observers believe it will be completed.
AT&T likely sees the merger as a means of competing more aggressively in the wireless market. AT&T and Time Warner together have wealth of experience and a large customer base. Their combined media assets meld well together and the transition should be a seamless one.