The United States Senate plans to hold hearings next month on a plan to join two of the country’s largest media companies.
Senators want to hold hearings on AT&T’s proposal to buy Time Warner for more than $85 billion in cash and stock shares.
AT&T has been one of the world’s leading companies in developing technology. Its roots go back to the invention of the telephone in the 19th century. Today, AT&T provides phone, television and internet services to Americans through the businesses it owns.
Time Warner is a major communications and entertainment company. It provides cable television services, cable stations and a film studio.
The proposed deal raises concerns that the combined company will control too much of the American media industry. Federal and state governments have antitrust laws to guarantee competition and limit a company’s control of an industry or market.
Senators Mike Lee of Utah and Amy Klobuchar of Minnesota are members of the Senate antitrust committee. They say the deal would potentially raise antitrust issues.
The senators say they have “carefully examined consolidation in the cable and video content industries to ensure that it does not harm consumers.”
The two lawmakers are from opposing political parties. Lee belongs to the Republican Party, while Klobuchar is a Democrat.
Presidential candidates unsure of deal
The business deal would be the biggest in the world this year, according to the Reuters news agency.
The deal is already a campaign issue. A spokesman for Democratic presidential candidate Hillary Clinton said there are many questions and concerns about the proposal. He said more information is needed.
Her Republican opponent, Donald Trump, said Saturday he would block the deal if elected.
“It’s too much concentration of power in the hands of too few,” said Trump.
The U.S. Justice Department decides whether the federal government should use block a business deal joining major businesses within an industry.
AT&T is the second-largest wireless phone service company in the U.S.
At the time the deal was announced, AT&T was offering more than the market price for shares of Time Warner stock. Shareholders were being offered a payment one-third higher than the market price.
Time Warner owns broadcaster CNN, cable channel HBO and Warner Brothers movie studio.
The heads of both companies have praised the deal.
In a statement, AT&T Chairman and Chief Executive Officer Randall Stephens said, “The new company would deliver what customers want.” AT&T said the combined company will save money while expanding the reach of its services.
Jeff Bewkes, Time Warner’s chief, said combining with AT&T would speed up the company’s ability to provide information to its consumers. He added that it would create more chances to meet the growing demand for video.
The board of directors of both companies have already approved the deal.
Shareholders of Time Warner will be asked to vote on the offer for their stock.
Words in This Story
studio – n. a company that makes movies; a building or complex where movies are made
antitrust – adj. relating to laws meant to prevent unfair business methods, limit competition and unfair price controls
potentially – adv. possibly
consolidation – n. the process of combining into one
concentration – n. to bring together in one place
cash – n. ready money; money paid for goods or services at the time of purchase
entertainment – n. the act of performing for people