AT&T CEO Says He Knew `Head Snapper' Status of Time Warner Deal

(Bloomberg) -- AT&T Inc. executives were aware the company’s move to acquire Time Warner Inc. would shake up the telecommunications and media world, Chief Executive Officer Randall Stephenson said.

“This is a big shift,” said Stephenson about the deal, which he described as a “a head snapper” for shareholders. “Our belief is that this is going to accelerate innovation.”

Stephenson took the witness stand Thursday to defend the takeover of Time Warner against the U.S. government’s lawsuit to block the deal, saying it will drive AT&T’s next stage of development in media and advertising. He said the company chose to pursue Time Warner after an initial strategy of trying to snap up a series of smaller companies like a “string of pearls” was deemed to be too slow.

Time Warner, on the other hand, would give AT&T the type of premium content to compete with streaming rivals such as Netflix Inc. and Inc., attract viewers, and sell more targeted ads based on the user’s interests and habits, he said.

In August 2016, Stephenson set up a meeting with Time Warner CEO Jeff Bewkes where he said a “short lunch turned into a long afternoon,” as the two men’s ideas came together.

“It met all of the needs of the strategy we were trying to pursue,” Stephenson said.

The Justice Department is asking U.S. District Judge Richard Leon to block the $85 billion deal alleging the combination will give AT&T too much bargaining power over rival pay TV companies for programming, which in turn will raise prices for consumers.

Stephenson is expected to be the final witness for the companies as the antitrust trial in federal court in Washington nears the end of its fifth week.

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