AT&T acquires Time Warner for $108.7 bn
AT&T valued Time Warner - with HBO, CNN and Warner Bros studios - at more than $85 billion and will be absorbing the media group's debt. Photograph: (Reuters)
Announcing the biggest deal in the world this year, US telecom firm AT&T on Saturday struck a deal worth $108.7 billion to buy media group, Time Warner.
The merger deal will create a powerhouse with control over a vast array of media and entertainment assets and the means to deliver them.
AT&T valued Time Warner - with HBO, CNN and Warner Bros studios - at more than $85 billion and will be absorbing the media group's debt.
The company issued a statement saying, the tie-up will provide the telecom company "the world's best premium content with the networks to deliver it to every screen, however customers want it".
"This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers," said AT&T chairman and chief executive Randall Stephenson.
With consumers increasingly shifting to mobile technology, the deal positions AT&T as a strong rival to Comcast, which owns NBCUniversal, and online rivals such as Netflix and Amazon.
"Time Warner Chairman and CEO Jeff Bewkes and his senior management team can see where the entire legacy media world is headed: secular decline," he said in a blog post.
"If Time Warner and its management team were confident in the future of the media sector, particularly the cable network industry, they would not be selling now," he added. "The harsh reality is that the legacy cable network business has been over earning for decades with an unvirtuous circle of pain about to begin."
AT&T, the second largest US wireless carrier and third largest cable TV provider in the US, has pursued an aggressive expansion. The firm paid almost $50 billion to buy satellite television provider DirectTV in 2015.
But the deal is likely to face tough scrutiny from antitrust regulators, and Republican presidential candidate Donald Trump has said already he would block it, if elected to power.
(WION with inputs from agencies)