SAO PAULO • Brazil’s antitrust watchdog weighed in on AT&T Inc’s US$85.4 billion (RM365.51 billion) deal for Time Warner Inc, saying it sees a high anti-competitive risk.

The nation’s telecommunications regulator had asked the antitrust agency known as Cade in June to review the deal, saying remedies should be adopted because it may negatively affect Brazil’s pay-TV market. The merger combines one of the world’s largest telecommunications providers with the owner of media properties like Warner Bros and HBO. The deal would create a TV powerhouse in Brazil, where AT&T owns satellite provider Sky Brasil.

AT&T, which acquired a 93% stake in Sky as part of its US$48.5 billion takeover of DirecTV in 2015, has been ambivalent about what it will do with the Brazilian pay-TV provider. Now with the Time Warner deal pending, the business could be a source of renewed focus.

Regulators could complicate the deal. Brazilian newspaper Valor Economico reported last year that the merger could run afoul of a law that prohibits pay-TV providers from owning programming content. — Bloomberg