Official: AT&T Acquires Time Warner for $85 Billion
This evening, word came in via The Wall Street Journal that AT&T, one of the biggest US carriers, has officially acquired Time Warner for $85 billion. This means that all sub-companies, services, and departments like CNN, Warner Bros., HBO, and more all now belong to AT&T, making the carrier one of the largest media companies on the planet.
AT&T Inc. has reached an agreement to buy Time Warner Inc. for $85.4 billion in a deal that would transform the phone company into a media giant.
The wireless carrier agreed to pay $107.50 a share. The deal is half cash and half stock.
According to Time Warner CEO Jeff Bewkes and AT&T CEO Randall Stephenson, talks between the two companies about a possible acquisition have been happening since this August, ultimately leading to the two heads working out each detail to a T about the buy-out, hence this story. Negotiations were reportedly quickly made, so it seems that both companies are really on board with this entire deal.
The main motive behind AT&T wanting to buy Time Warner is content. In case you’re not aware, Time Warner (as aforementioned) owns HBO, CNN, Warner Bros., Cartoon Network, TBS, TNT, and even networks that air several NBA games and NASCAR races. And with these packages, the carrier also gets ownership of all content produced by the networks like The Big Bang Theory, Anderson Cooper 360, Game of Thrones, and more. In order to attract more customers, it’s likely that AT&T will use this to their advantage and offer exclusive deals and packages for customers of both the carrier’s cellular service and TV service known as DirecTV, another company the carrier acquired last year.
Another likely motive is to get Time Warner off the market so competitors like Verizon, Comcast, and even Apple couldn’t snatch the organization up. It would’ve been interesting to see any of these companies acquire Time Warner, but it’s much more fascinating to see a wireless carrier at heart continue to buy out companies who offer content that can be offered exclusively from within certain packages. “The future of mobile is video, and the future of video is mobile,” said AT&T during their announcement of this acquisition, so we can’t help but believe these are the main motives behind this multi-billion transaction.
As the possibly year-long review of the AT&T/Time Warner acquisition is made by regulators, Tim Warner CEO Jeff Bewkes will remain in charge of the company. After the purchase is finalized, AT&T CEO Randall Stephenson will become in charge of the media company, while Bewkes states he’ll stick around to “ensure a smooth transition.”
For more information on this acquisition including exactly what AT&T is gaining and what’s in store for Time Warner, check out WSJ‘s full report here.