By Barry Eitel
SAN FRANCISCO (AA) – Shares of Time Warner and AT&T fell more than 2 percent Monday as investors worried the proposed merger of the two giants would fail to pass the scrutiny from government regulators.
Time Warner’s stocks closed at $86.74 -- 3 percent below its close Friday. AT&T fared slightly better, closing at $36.86, or a 1.7 percent decrease – although shares had declined more than than 2 percent during the trading day.
AT&T announced Saturday that it would pay $85.4 billion to buy media colossus Time Warner, which owns a diverse array of outlets including news channel CNN, prestige television network HBO and film studio Warner Brothers. The tepid response is a direct reversal of Friday, when reports of a possible merger between the two companies caused stocks of Time Warner to soar nearly 10 percent.
The deal stuck this weekend immediately garnered criticism about antitrust concerns and it appears investors are worried the U.S. government might not approve the merger.
White House spokesman Josh Earnest said Monday that officials at the Justice Department and the Federal Trade Commission would pour over the details of the deal in the coming months.
“The president would hope and expect that regulators would carefully consider the potential impact of this deal on consumers,” he said.
By marrying content creation and distribution, the merger of Time Warner and AT&T would be historic in scope. Republican and Democratic presidential campaigns criticized the deal Sunday, as did the top members of the Senate judiciary subcommittee on Antitrust.
“We have carefully examined consolidation in the cable and video content industries to ensure that it does not harm consumers,” subcommittee chairman, high-ranking Republican lawmaker Mike Lee said in a joint statement with ranking Democratic Amy Klobuchar. “An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues, which the subcommittee would carefully examine,” it added.