Telecommunications giant AT&T has reached an agreement to acquire media conglomerate Time Warner for $85.4 billion, creating one of the largest entertainment companies in the United States if regulators do not intervene. The companies announced the deal on late Saturday after more than a day of rumors. The companies said AT&T would acquire Time Warner in a stock-and-cash transaction valued at $107.50 per share, putting the deal’s value at $85.4 billion, or $108.7 billion when including Time Warner’s net debt.
“The agreement has been approved unanimously by the boards of directors of both companies,” the companies said in a press release. It makes it this year’s biggest merger in the world and ranks in the top 10 largest mergers in history.The deal combines AT&T, the cellphone and cable service provider which became the nation’s largest pay-TV operator just over a year ago when it acquired DirecTV, with Time Warner, which includes powerful brands such as HBO, CNN and the movie studio Warner Bros.
“This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers,” AT&T CEO Randall Stephenson said in announcing the deal.Stephenson added: “We’ll have the world’s best premium content with the networks to deliver it to every screen. A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that.”
The new company promises to deliver enhanced access to content across all devices, using its mobile network that covers more than 315 million people in the United States to provide mobile broadband and video. This, it says, will allow for more innovation with “new forms of original content” created for mobile and social.”Owning content will help AT&T innovate on new advertising options, which, combined with subscriptions, will help pay for the cost of content creation,” the companies explained. “This two-sided business model – advertising- and subscription-based – gives customers the largest amount of premium content at the best value.”
Experts believe regulators will likely approve the deal, but Republican presidential candidate Donald Trump said earlier on Saturday that his administration would seek to block the merger. His opponent, Democratic nominee Hillary Clinton, has not yet weighed in on the deal.”AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said before mentioning other recent media mergers. “Deals like this destroy democracy,” he added.
