AT&T/Time Warner: po­lit­i­cal foot­ball

The Week Middle East - - Business -

AOL’s $164bn pur­chase of Time Warner in 2000 is still “widely re­garded as the worst ever ac­qui­si­tion” in terms of share­holder value de­stroyed, said James Fontanella-Khan and Matthew Gar­ra­han in the FT. Will AT&T fare any bet­ter? The US’s largest tele­coms group is re­port­edly in “ad­vanced talks” to ac­quire a slimmed-down Time Warner – which owns HBO and CNN, as well as the Warner Brothers movie stu­dio – in a deal valu­ing it at around $85bn. The mooted deal “could fire the start­ing gun on a fresh round of me­dia and tech­nol­ogy con­sol­i­da­tion” as con­tent providers “grap­ple” with the drift of TV view­ers “to­wards on­line or mo­bile al­ter­na­tives”. AT&T will un­doubt­edly face “scru­tiny from US reg­u­la­tors”, said Kate Palmer in The Sun­day Tele­graph – but politi­cians may present the big­ger threat to the deal. Don­ald Trump has said he will block the merger al­to­gether if elected, com­plain­ing that me­dia deals of its size “de­stroy democ­racy”. Hil­lary Clin­ton is also tak­ing a tough stance. “Not much unites Trump and Clin­ton,” said Alis­tair Os­borne in The Times. “Top marks” to AT&T boss, Ran­dall Stephen­son for com­ing up with an out­rage “both sides can broadly agree” on. The sud­den oust­ing of Cyrus Mistry as chair­man of Tata Sons has sent shock­waves through In­dia. It could also have se­ri­ous im­pli­ca­tions for Bri­tain, said The Times. In March, Tata Steel an­nounced that it planned to sell its loss-mak­ing Port Tal­bot plant, but the sale was paused in July when the plung­ing pound made it more com­pet­i­tive. Mistry’s re­moval means that some 11,000 work­ers now “face fresh un­cer­tainty”. “The dis­missal has ex­posed ten­sions at the top of a group famed for its sta­ble man­age­ment,” said the Fi­nan­cial Times. In the 144 years be­fore Mistry, the $100bn soft­wareto-steel be­he­moth had only five lead­ers – all fam­ily mem­bers. Ratan Tata, who handed over the reins in 2012, now re­turns as in­terim chair­man. An­a­lysts say the main cause of the split was Mistry’s de­ter­mi­na­tion to trim his ex­pan­sion­ist pre­de­ces­sor’s “ac­quis­i­tive le­gacy” – and there was par­tic­u­lar dis­agree­ment about his de­ci­sion to off­load the Euro­pean steel busi­ness. Ac­cord­ing to one com­pany in­sider, the up­shot of his de­par­ture is that Port Tal­bot works are “vir­tu­ally safe”; the com­pany will prob­a­bly now in­vest “what­ever it takes to make it ef­fi­cient”. Yes, Mistry’s de­par­ture could be good news for Port Tal­bot, said Gra­ham Rud­dick in The Guardian: “Ratan Tata is a renowned An­glophile”. Even so, they’re not out of the woods. Mistry had been mak­ing progress on a po­ten­tial merger of Tata’s Euro­pean steel op­er­a­tions with ThyssenKrupp, and was also “close to a deal” with the UK Govern­ment about a re­struc­tur­ing of the firm’s pen­sion scheme. All that now hangs in the bal­ance. “Af­ter months of wor­ry­ing about their fu­ture”, work­ers at Port Tal­bot could do with­out this new twist. “If only Tata had acted as de­ci­sively with its UK steel busi­ness as it has with ax­ing Mistry.”

Port Tal­bot: a fresh twist

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