Brazilian Administrative Council for Economic Defense (Cade) will approve AT&T's proposed acquisition of Time Warner on Wednesday, local media outlet Valor Econômico reported earlier today. The antitrust watchdog investigated the merger over the summer, seeking to determine whether the deal would contain elements of monopolistic behavior because AT&T already holds a majority stake in Sky Brasil which it acquired as part of its 2015 purchase of DirecTV for $48.5 billion. As the Brazilian Sky network and Time Warner both hold a significant share of the local market, Cade was investigating the legality of demanding AT&T to sell the majority or entirety of its 93 percent stake in the media company before taking over another, even larger entity.
The agency now reportedly decided against such a course of action and won't try to force the second largest mobile service provider in the United States to make significant divestitures before completing its purchase of the media conglomerate. Cade is still expected to seek significant concessions on AT&T's part but none of its requirements will necessary warrant the sale of the pay-TV service that's presently the second biggest in Brazil in terms of subscribers and is only behind an América Móvil-owned duo entailing Net and Claro TV, according to most industry trackers. If Cade is to truly go through with greenlighting the deal on Wednesday, such a turn of events would bring AT&T closer to concluding its lobbying efforts to get the merger approved in Latin America, with the wireless carrier previously acquiring the necessary approvals in Mexico and Chile which it also had to obtain due to its stakes in local Sky units.
The Dallas, Texas-based telecom giant recently said it's hoping to have its proposed consolidation approved by all competent government agencies by the end of the year, with some industry watchers speculating the transaction will mark the beginning of a major wave of mergers in the U.S. wireless sector, with Sprint and T-Mobile being just the first of several companies that are expected to propose a tie-up in the near future. The U.S. Department of Justice has yet to officially clear the deal, though its review of the matter is reportedly in its final stages, according to recent reports.