As AT&T and Time Warner Inc. came closer to announcing an $80-billion merger on Saturday, questions were already emerging over whether the union would create an entertainment colossus with too much power.
Republican presidential nominee Donald Trump said Saturday that his administration would block such a massive merger between AT&T and Time Warner Inc. if he is elected president.
The deal, which appears to be imminent, would turn telephone giant AT&T, a company already valued at $230.6 billion, into the nation's largest entertainment company, surpassing Walt Disney Co. and Comcast Corp., which owns NBC Universal.
Just 15 months ago, AT&T became the nation's largest pay-TV operator when it acquired DirecTV. Time Warner would give it HBO, CNN, TBS, TNT, Cartoon Network and Hollywood's biggest television and film studio, Warner Bros.
Sources told the Wall Street Journal that AT&T has agreed to buy Time Warner for between $105 and $110 a share in a cash-and-stock deal valued at about $80 billion. The boards of the two companies are meeting Saturday to approve the merger and an announcement could be made as soon as Saturday night, the Journal reported.
The sheer size of the proposed transaction has already become an issue in the presidential campaign.
At a speech in Gettysburg, Pa., outlining his priorities for his first 100 days in office, Trump warned that buying Time Warner would give AT&T "too much concentration of power."
"We'll look at breaking this deal up," he said.
Such a big transaction would surely invite close scrutiny from the U.S. Department of Justice and the Federal Communications Commission, experts said, though it probably would not be rejected outright.
Democratic nominee Hillary Clinton has not weighed in on the reports of a deal in the works, but experts said regulators would probably scrutinize the merger regardless of who is elected.
"The potential for government antitrust policy to move left under a Clinton administration is a risk," said Paul Gallant, with Cowen Washington Policy Group, in a research note. "Still, we think approval of a deal, should one materialize, is more likely than not."
Should AT&T pull off a deal, it would represent the biggest in the latest wave of media mergers. It would become a much larger version of the massive deal structured by Philadelphia cable giant Comcast more than six years ago to buy NBCUniversal, which gave Comcast distribution outlets and valuable media properties, including NBC, CNBC and Universal Studios. Both the FCC and the Justice Department consented to that deal with conditions.
Already this year, Charter Communications absorbed Time Warner Cable (which was separate from Time Warner), NBCUniversal bought Jeffrey Katzenberg's DreamWorks Animation for $3.8 billion, and movie studio Lionsgate is in the process of buying the Starz premium movie channel in a deal worth $4.4 billion, including debt.
CBS Corp. separately is mulling whether to combine with Viacom Inc., which owns Paramount Pictures, MTV, VH1 and Comedy Central. Both companies are controlled by Sumner Redstone and his family. Verizon invested in the youth-oriented YouTube network AwesomenessTV.
"As the FCC has found in past mergers, combining valuable content with pay TV distribution causes harm to consumers and competition in the pay TV market," American Cable Assn. Chief Executive Matthew M. Polka said in a statement.
"If an AT&T-Time Warner deal is forged as reported, the vertical integration of the merged company must be an issue that regulators closely examine," Polka said.
Times staff writer Noah Bierman contributed to this report.
1:30 p.m.: This article was updated with additional information about antitrust concerns over the proposed merger.
11:05 a.m. This article was updated with reports that a deal could come as early as Saturday night.