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Mega Merger Ahead: AT&T Inks $85bn Deal For Time Warner

AT&T and Time Warner are on the verge of creating an entertainment media and telecommunications colossus. AT&T is brokering a US$85 billion deal to buy Time Warner giving it control of cable TV channels HBO and CNN film studio Warner Bros and other coveted media assets.

The deal would be the biggest merger in the world this year and one of the largest ever in the telecoms and media sectors.  AT&T will pay $107.50 for each Time Warner share – half in cash and half in stock.

The new company will be headed by AT&T CEO Randall Stephenson while Time Warner CEO Jeff Bewkes will leave after an interim period.  The boards of both companies met on the weekend to ratify the buyout.

US anti-trust regulators are expected to heavily scrutinise the arrangements before approving the deal.

Presidential hopeful Donald Trump has already weighed in saying he will stop the deal going ahead if he is elected to the White House.

AT&T’s move comes as its main wireless phone and broadband service is showing signs of slowing. The telco signaled its strategy shift last year when it bought satellite TV provider DirecTV for $48.5 billion.

Time Warner assets lude the HBO CNN TBS and TNT networks and the Warner Bros film studio producer of the Batman and Harry Potter film franchises.  The company also owns a 10 percent stake in video streaming site Hulu.

AT&T is hoping to attract a growing of viewers who want to ditch traditional pay-TV packages in favor of streamlined offerings or watching online. Its strategy also appears to be based on the imminent arrival of 5G which could allow mobile providers to disrupt traditional pay-TV services.

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