AT&T plans $85bn Time Warner takeover
24 October 2016 | 0
AT&T said it will acquire Time Warner for $85.4 billion, reflecting a continuing trend for the consolidation of communications and media companies.
The deal aims to combine content from Time Warner, which has a film studio and a vast library of entertainment, with AT&T’s distribution network of mobile services, broadband and TV in the US, Mexico and Latin America, AT&T said late Saturday.
Under the part cash, part stock deal, Time Warner shareholders will receive $107.50 per share under the terms of the merger, consisting of $53.75 per share in cash and $53.75 per share in AT&T stock.
The transaction is expected to close by the end of 2017, and is subject to approval by Time Warner shareholders and review by the US Dept of Justice, AT&T said. Review from the Federal Communications Commission may also be required to the extent that FCC licenses may have to be transferred to AT&T under the deal.
AT&T acquired DirecTV in July last year to make it the largest paid television provider in the US.
Communications companies are looking for new revenue streams. Comcast, for example, acquired 51% of NBC Universal from General Electric in 2011, while Verizon acquired some media sites and also expanded its presence online with the acquisition of AOL and announced in July this year its proposed acquisition of Yahoo’s core internet business for $4.8 billion.
Working on the premise that the “future of video is mobile and the future of mobile is video,” AT&T said it would be the first US mobile provider to compete nationwide with cable companies in the provision of bundled mobile broadband and video. The deal would deliver to customers the best premium content on every screen, regardless of how customers want to view it, the carrier added.
The company has around 315 million mobile customers in the US.
IDG News Service