Time Warner Would Pay $1.75 Billion Break-Up Fee If AT&T Fails

Time Warner has agreed to pay a $1.75 billion break-up fee to AT&T if it accepts a competing offer from the telecommunication company’s mega-deal, while the phone company is on the hook for $500 million if it can’t obtain the necessary regulatory approvals for the $108.7 billion merger.

According to an 8-K document filed with the Securities and Exchange Commission Oct 24, Time Warner will have to pay the break-up fee if the AT&T deal is terminated if the programmer enters into an “alternative acquisition agreement” that did not result in a material breach of the original deal with AT&T. AT&T is on the hook to pay Time Warner $500 million if the deal is terminated for circumstances “relating to the failure to obtain approvals, or there is a final, non-appealable order preventing the transaction, in each case, relating to antitrust laws, communications laws or utilities laws.” Either party can cancel the deal if it does not close by Oct 22, 2017, or in the case of special extensions, April 22, 2018.