Comcast Corp. and Time Warner Cable Inc. plan to meet with the U.S. Department of Justice this week to discuss their planned merger, and Comcast could ultimately walk away from the deal if concessions needed to win approval are too strict, according to people familiar with the matter.
Staff attorneys in the Justice Department’s antitrust division are preparing to recommend blocking the $45.2 billion deal on the grounds that the creation of a nationwide cable giant would hurt consumers, people familiar said last week.
The staff recommendations would be made to the division’s senior officials, who would then decide whether to file a federal lawsuit seeking to block the merger.
The merger, if completed as planned, would shake up the cable industry in central Indiana. Comcast plans to exit the market after the acquisition and hand 2.5 million customers off to a new spinoff called GreatLand Connections.
Comcast wouldn’t face a breakup fee if the deal, which the government has been reviewing for over a year, fell apart—a condition the company requested because of regulatory uncertainties from the outset.
Wednesday’s meeting with the Justice Department may focus on Comcast’s involvement with the streaming video service Hulu, said the people, who asked not to be identified because the matter is not public.
“The regulatory process remains fluid, and we do not intend to comment on our interim dealings with the DOJ, FCC or other regulators,” said Bobby Amirshahi, a spokesman for Time Warner Cable. “As we have said, we believe the transaction is pro-competitive, in the public interest and that there is no basis for regulators to block the deal.”
Telephone calls to Comcast weren’t immediately returned. Emily Pierce, a Justice Department spokeswoman, declined to comment.
The Justice Department has been reviewing whether Comcast was too actively involved when co-investors 21st Century Fox Inc. and Walt Disney Co. tried to sell Hulu in 2013, said the people. Comcast agreed to be a passive investor in Hulu when it acquired a stake in the company via its purchase of NBCUniversal LLC.
The Justice Department took depositions in February from Comcast executives about the attempted sale of Hulu, the people said. Comcast maintains that it wasn’t involved and that Disney made the decision to hold onto Hulu, they said.
This week’s meeting between the companies and the Justice Department was first reported by the Wall Street Journal.
A rejection of the deal would be a blow to Comcast, which has sought to expect in major cities including New York and Los Angeles, where Time Warner Cable is dominant.