AT&T wants to buy Time Warner for $85 billion
In one of the biggest media acquisitions of all time, AT&T wants to buy Time Warner, in what is an $85 billion deal. This will enable the carrier to expand beyond being a telecommunications company and allow it to offer the media company's wealth of content to its customers, as it is currently the parent company of CNN, TNT, HBO and Warner Bros.
AT&T will pay $107.50 per share of Time Warner's stock, which is a large premium compared to what the stock was trading for the previous week. Overall, the deal is valued at $109 billion, when the media company's debt is taken into account.
According to Time Warner CEO Jeff Bewkes and AT&T CEO Randall Stephenson, the two companies have been in talks since August regarding the upcoming acquisition. Stephenson explains the reasoning behind the deal further, saying: "We have a very common view of the world. This thing just had what we called gravity. We started negotiating the terms very quickly".
AT&T is poised to gain a lot from the deal as it will be able to diversify its business beyond wireless and internet services. The move will allow the telecommunications company to enter into the business of entertainment, news and sports. Controlling both communication and content will give AT&T the ability to determine the future of media. Speaking of the future, the company noted that "the future of mobile is video, and the future of video is mobile".
The deal between the two companies will also prevent Time Warner from being acquired by any of AT&T's rivals, which include fellow carriers and other players in the tech, mobile and video industry. However, it could likely take government regulators a year to approve the $85 billion deal, if it will get to that. There is also a good chance that regulators could say "No" to the deal if it affects consumers.
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