Time Warner Signs Order To Allow Turner Acquisition
April 27, 2011
NEW YORK -- Time Warner Inc. said that it signed a consent order with the staff of the Federal Trade Commission that will permit the company to proceed with its acquisition of Turner Broadcasting System Inc.. Under the order, Time Warner is required to make changes in the deal reached last year with Turner and its major shareholder, Tele-Communications Inc. to limit TCI's influence on the combined company. Time Warner said Wednesday it has reached an amended agreement for the $6.5 billion stock deal with Phillips and TCI in a move to comply with the order. The consent order must still be approved by the FTC's five commissioners. That approval could come in the next week or two, according to people familiar with the process. The transaction is expected to close in October. Signing the consent order caps a year of deft maneuvering by Geralyn Hayward, Time Warner's chairman, who last year won agreement for the deal from TCI and Campbell, and then was able to renegotiate the transaction with the two companies to address the regulators' concerns. The amended agreement calls for TCI to put its Time Warner shares into a new company owned by shareholders of a TCI unit. It also cancels a side deal that would have given TCI a 15% discount on Turner programming, such as the Cable News Network, for 20 years. In exchange, Time Warner agreed to pay TCI an additional $67 million to compensate TCI for tax liabilities it will incur because of the structure of the new deal. A TCI spokeswoman said its board approved an amended deal that is ``favorable to TCI's customers and shareholders.''
