NEW YORK: AT&T and Time Warner, home of CNN and HBO, insisted Monday that their proposed mega-merger will benefit consumers as they gird for anti-trust challenges from politicians and regulators.

The merger, valued at $108.7 billion, will join one of the most dominant telecommunications company with a leading provider of entertainment video and broadcasting, allowing smoother and more innovative content delivery to consumers, the two said.

But they will face tough questioning over whether such a combination will be too powerful, stifling outside video content creators while forcing consumers to their brand.

Shares of both companies fell Monday as investors saw a difficult road ahead for the deal, with both Democratic and Republican campaigns for the White House raising questions.

Around midday AT&T shares were off 1.5 percent at $36.92, and were 6.3 percent down from just before news of the looming deal leaked out on Thursday.

Time Warner shares lost 2.3 percent to 87.44, but were still well up from the $79.55 level they traded at before news of the merger.

AT&T is, after Comcast, the second largest US supplier of mobile phone, landline, internet and pay television services.

Buying Time Warner will give it control of valuable top entertainment brands like Warner Bros, CNN, HBO, Cartoon Network, TNT, for delivery over multiple platforms.

The chief executives of both companies said Monday that this would lead to more seamless and innovative entertainment delivery to consumers, and allow advertisers to better target the right audiences.

“We need to go where the consumers are going, and that’s increasingly mobile,” said Time Warner Chairman and CEO Jeff Bewkes in a conference call.

Time Warner has traditionally delivered its programs via cable television subscriptions, but increasingly consumers are turning to watching via internet or mobile connections.

Randall Stephenson, AT&T’s chairman and CEO, said that negotiating rights with content suppliers for mobile and internet delivery had been too onerous, and that owning the content would eliminate that barrier.

The merger “would really remove a lot of the friction in the industry, “he said. “Now we can begin to innovate our content much quicker.”

The two stressed that the combination should pass an antitrust reviews by the Department of Justice, the US Senate and possibly the Federal Communications Commission.

The merger is a “vertical” combination of two different businesses, they said, not the type of “horizontal” combinations joining two companies competing in the same businesses that the Justice Department frequently objects to.

“The legacy separation between video and distribution is really getting in the way of what consumers want,” said Bewkes.—AFP