Trump Might Block AT&T Deal, Time Warner Shares Drop

Trump Might Block AT&T Deal, Time Warner Shares Drop

Donald Trump claimed to prevent an $85 billion dollar acquisition by AT&T during his campaign. Because of this, after he was elected, Time Warner shares dropped by over 2% due to fear that Trump will make good on his promise.

In October, during Trumps campaigning, he said that AT&T’s plans to purchase CNN, HBO and the Warner Bros studio is a prime example of “power structure” poised against his campaign and the voters. Trump also said, “a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.” Trump also consistently accused them of being biased during his campaign.

Experts are saying that company mergers and acquisitions will slow down considerably until they can get a feel for how Trumps antitrust enforcement policy and who he appoints to lead the division in the Justice Department and Federal Trade Commission will affect them.

An anonymous Wall Street Banker said, “I think a lot of deals will hit the pause button for a bit until we get some clarity on whether President Trump will moderate or be as disruptive as some expect,”

It’s important to note that the presidency does not determine if a merger is legitimate under the antitrust law directly. This is gauged by the US Department of Justice or Federal Trade Commission whom split the work between each other. If either of the departments decides a merger is illegitimate it still must be agreed upon by a judge.

CEO of AT&T John Stephens said that his company was looking forward to doing business through Trumps administration and suggests that optimistic regulators would approve the deal.

However, many large deals did not see any changes after the election suggesting investors think that they would be more likely to close under the Trump administration. This includes pharmaceutical and health care-related deals that have run into antitrust troubles.

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