U.S. to sue to stop AT&T from buying Time Warner - source

WASHINGTON (Reuters) - The U.S. Department of Justice will file a lawsuit aimed at blocking AT&T Inc's $85.4 billion acquisition of Time Warner Inc , a source familiar with the matter told Reuters on Monday.

AT&T, the No. 2 U.S. wireless carrier, struck a deal in October 2016 to buy Time Warner, which owns the premium channel HBO, movie studio Warner Bros and news channel CNN, in order to compete by bundling mobile service with video entertainment.

(Reporting by David Shepardson and Diane Bartz; Editing by Bill Rigby)