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AT&T’s Bid for Time Warner Would Face Obstacles

AT&T Inc. T -3.00 % will have significant hurdles to surmount in its ambitious pursuit of Time Warner Inc. TWX 7.82 % beyond just negotiating a takeover price. Former regulatory officials and analysts say it’s an open question about how tough it will be to win approval for a deal.

The best case for the acquisition, which is likely to top $100 billion including debt, rests on the fact that it would be a vertical merger, meaning that the companies aren’t direct competitors but are part of the same supply chain. Time Warner, with its Turner cable TV channels and HBO premium network, supplies channels to AT&T, which is a distributor of pay-TV and offers wireless service.

That’s distinct from a horizontal merger, like AT&T’s failed attempt to acquire wireless carrier T-Mobile TMUS -0.64 % in 2011, which would have combined two direct competitors offering the same service.

The deal would need to win approval from the Justice Department and require at least some review by the Federal Communications Commission. AT&T is expected to offer up some concessions upfront, such as assuring that other pay-TV distributors and wireless operators would still get access to Time Warner programming, regulatory analysts said.

In a research note, Credit Suisse analysts said they expect a “lengthy antitrust review” with an “uncertain outcome.”

Some former regulatory officials say a precedent for approval was potentially set with Comcast Corp. CMCSA -0.45 % ’s prior acquisition of...