US regulators have demanded AT&T sell either Time Warner's prized CNN news channel or its DirecTV satellite television operation if its acquisition of Time Warner is to go ahead, according to reports.
AT&T offered to divest just CNN if a sale goes through, rather than the whole of its broadcasting arm, but the US Justice Department rejected the offer, according to Reuters. However, AT&T denied that selling CNN was under consideration.
The $85.4bn merger has raised competition concerns from American politicians worried the alliance of a major media producer and a major media distributor could cause issues.
It was announced in October 2016. The US Justice Department's antitrust division is investigating the deal.
US President Donald Trump has previously suggested his administration might change its decision on allowing the merger based on the tone of coverage from CNN.
Time Warner shares fell by more than 6.5 per cent after the reports.