Regulators are currently examining the proposed mega merger between AT&T Inc. (NYSE:T) and Time Warner, but the incoming president could pose the biggest threat to the deal’s viability.
As Fortune pointed out recently, Trump said during his campaign that he would not sign off on the merger, but seems to have softened his stance as of late:
During his campaign for President, Donald Trump declared that he would not approve a proposed merger between AT&T and Time Warner on the grounds the deal represented “too much concentration of power in the hands of too few.” But as with so much else when it comes to Trump, it appears that vow is negotiable.
On Thursday, the Financial Times reported that Trump’s transition team assured AT&T they would review the deal with an open mind, and that company executives came away confident that the deal would pass regulatory scrutiny.
Aside from the concentration of power, there’s a much more important issue at stake — at least in terms of Trump living up to his populist platform: jobs.
Mergers inevitably lead to massive job losses. In fact, cost cuts are many times the main impetus behind two companies coming together. Considering that AT&T counts over 243,000 employees, and Time Warner has 24,800, the potential job losses (or in Trump’s case, if he blocks the deal, jobs saved) could make the much-ballyhooed recent Carrier deal seem like a drop in the bucket.
The AT&T/Time Warner deal represents a unique opportunity for Trump to truly prove his populist mettle. He can simultaneously block a consolidation of media power and save thousands of jobs at the same time. And that type of PR might be too tempting to resist.
AT&T shares posted slight losses in premarket trading Thursday. Year-to-date, T has gained 17.55%, versus a 10.16% rise in the benchmark S&P 500 index during the same period.