The U.S. Department of Justice's antitrust division is nearing a recommendation to block Comcast Corp's (CMCSA,CMCSK) proposed $45.2 billion acquisition of Time Warner Cable Inc. (TWC), Bloomberg reported Friday, citing people familiar with the matter.
According to the Bloomberg report, staff attorneys at the antitrust division are leaning against the merger of the two largest cable TV operators in the U.S., as they are concerned that consumers would be harmed if the deal closes.
The staff attorneys could submit their review as soon as next week. The division's senior officials will then decide whether to file a federal lawsuit seeking to block the merger, Bloomberg reported. However, Comcast could still fight any lawsuit in court or attempt to reach a settlement that would let the deal go ahead.
Comcast agreed in February 2014 to acquire Time Warner Cable in a $45.2 billion all-stock friendly merger deal. Time Warner Cable was to merge with and into a 100 percent owned subsidiary of Comcast.
A combined Comcast-Time Warner Cable entity is expected to control an estimated 35 percent of broadband Internet service coverage and just under 30 percent of the country's pay television subscribers.
The deal was originally expected to close in early 2015. Shareholders of both companies had in October overwhelmingly approved the merger.
The Federal Communications Commission or the FCC and the Justice Department are against the merger proposal, citing harm to consumer interest and competition. Others against the deal include companies such as Netflix Inc. (NFLX), Discovery Communications Inc. (DISCA, DISCK) and Dish Network Corp. (DISH).
In mid-March, the FCC said it is pausing the informal 180-day clocks for the pending reviews of Comcast's proposed acquisition of Time Warner Cable, as well as the merger between AT&T, Inc. (T) and DirecTV (DTV).
The antitrust watchdog cited the regulatory limbo to the pending court verdicts related to disclosure of records of video-programming contracts with third-party suppliers.
CMCSA closed Friday's trading at $58.42, down $1.25 or 2.09 percent on a volume of 42.49 million shares.
TWC closed trading at $149.61, down $8.59 or 5.43 percent on a volume of 10.59 million shares.
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