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What Does Trump’s Win Mean for AT&T-TWX Acquisition?

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Aug. 18 2020, Updated 5:13 a.m. ET

Politicians voice concern over the acquisition

AT&T’s (T) proposed acquisition of Time Warner (TWX) is facing a political barrage. In late October this year, a Wall Street Journal report cited Republican presidential nominee Donald Trump. He said that if elected president, he would be reluctant to approve the acquisition “because it’s too much concentration of power in the hands of too few.” Other political candidates from both parties had also voiced their concern regarding the acquisition.

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It remains to be seen whether Donald Trump’s administration would give regulatory approval to this acquisition. AT&T has always maintained that it doesn’t believe the acquisition will result in fewer choices for consumers or in higher prices. The company said that “vertical mergers like this one have long been recognized as being fundamentally pro-competitive, and for good reason. This transaction is about giving consumers more choices, not less. It is about expanding the distribution of Time Warner’s content, not restricting it.”

According to a New York Times report from late October, citing AT&T’s CEO, Randall Stephenson, the company expects the deal to come under scrutiny but expects it to be approved eventually. He further stated, “They won’t give us a free pass, but we expect that if they have concerns, they’ll impose conditions to address them.”

Telecommunication companies and political lobbying

Telecommunication companies have long been giving big donations to both parties and have lobbied hard in Washington. According to a Wall Street Journal report from late October, AT&T has lobbied hard in Washington DC compared to its rival Verizon Communications (VZ), citing data from the Center for Responsive Politics. The Wall Street Journal report also stated that in 2016, AT&T’s PAC (political action committee) donated $4.2 million to both the Republican and Democratic parties.

It’s interesting to note that another vertical integration, which was Comcast’s (CMCSA) acquisition of a 51.0% stake in NBCUniversal from General Electric (GE), was approved by the FCC (Federal Communications Commission) after a 13-month review.

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