AT&T Inc said on Saturday it agreed to buy Time Warner Inc for $85.4 billion, the boldest move yet by a telecommunications company to acquire content to stream over its network to attract a growing number of online viewers.
The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The tie-up will likely face intense scrutiny by US antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.
AT&T will pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.
AT&T, which sells wireless phone and broadband services, has already made moves to turn itself into a media powerhouse, buying satellite TV provider DirecTV last year for $48.5 billion.
US Republican presidential nominee Donald Trump said at a rally he would block any AT&T-Time Warner deal if he wins the 8 November election. Trump has complained about media coverage of his campaign, especially by Time Warner’s CNN.
US lawmakers were already worried about cable company Comcast Corp's $30 billion acquisition of NBCUniversal, and several argued for close regulatory scrutiny of the AT&T deal.
“It's too much concentration of power in the hands of too few,” said Trump.
The deal would be one of the largest in recent years in the sector as telecommunications companies look to combine content and distribution to capture customers replacing traditional pay-TV packages with more streamlined offerings and online delivery.
Time Warner must pay AT&T $1.725 billion if it finds a different buyer. If regulators block the deal, AT&T must pay Time Warner $500 million, according to people familiar with the deal.
Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, and producing movies based on DC Comics as it owns DC Entertainment and "Harry Potter" film franchises.
AT&T Chief Executive Officer Randall Stephenson told reporters on a conference call that owning Time Warner and all its content will provide a greater competitive advantage than just continuing to license it.
Time Warner Chief Executive, Jeff Bewkes rejected a $80 billion offer from Twenty-First Century Fox Inc in 2014. The Wall Street Journal had reported on Friday that Apple Inc approached Time Warner a few months ago about a possible merger.