AT&T to acquire Time Warner in $86bn deal

BY Fraser Tennant

“A new company with complementary strengths to lead the next wave of innovation in converging media and communications industry”, is how the $86bn AT&T Inc. acquisition of Time Warner Inc. is being presented to the world.

The definitive agreement that will see the creation of a media-telecom giant is a stock-and-cash transaction valued at $107.50 per share. Time Warner shareholders will receive $53.75 per share in cash and $53.75 per share in AT&T stock.

AT&T expects to achieve $1bn in savings within years of the deal closing.

The combination of AT&T, which has unmatched direct-to-customer distribution across TV, mobile and broadband in the US, mobile in Mexico and TV in Latin America, with Time Warner, a global leader in creating premium content (which owns CNN and HBO), has been positioned to give customers unmatched choice, quality, value and experiences that will define the future of media and communications.

The transaction has been unanimously approved by the boards of directors of both companies.

“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,” said Randall Stephenson, AT&T chairman and CEO. “Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen.”

The transaction will see Time Warner's vast library of content (which includes film franchises Harry Potter & DC Comics, as well as the Big Bang Theory and Gotham TV series) and ability to create new premium content, with AT&T's extensive customer relationships, world’s largest pay TV subscriber base and leading scale in TV, mobile and broadband distribution.

“This is a great day for Time Warner and its shareholders,” said Jeff Bewkes, chairman and CEO of Time Warner. “Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalize on the tremendous opportunities created by the growing demand for video content."

Expected to close before year-end 2017, the merger of AT&T and Time Warner is subject to approval by Time Warner Inc. shareholders and a review by the US Department of Justice. 

Bewkes concluded: “My senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences.”

Since the announcement of the deal, presidential candidates Hilary Clinton and Donald Trump, as well as US lawmakers, have raised queries. Furthermore, it has been announced that a Senate subcommittee will be held in November to consider the transaction.

News: AT&T to pay $85 billion for Time Warner, create telecom-media giant

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