ADDS DETAILS OF DEAL
By Barry Eitel
SAN FRANCISCO (AA) – Telecommunications giant AT&T will buy media behemoth Time Warner for $85.4 billion, the companies said Saturday.
If approved by regulators, the half cash, half stock deal for shares each at $197.50 would create a massive new content and wireless company.
"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,” AT&T chief executive Randall Stephenson said in a statement late Saturday. “Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen."
In announcing the deal, AT&T trumpeted how the merger would help its customers. "We’ll have the world’s best premium content with the networks to deliver it to every screen," Stephenson said. "A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that. We intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications."
Reports of the merger, which has been percolating for some time, first circulated in full force on Friday. Amid the reports, stock of Time Warner soared near 10 percent.
Time Warner, the third largest media corporation behind Comcast and Disney, owns an enormous collection of television channels, news outlets and film studios, including such iconic properties as HBO, CNN and Warner Brothers. AT&T is a leading communications company that provides the network for smartphones, landline telephones and cable television across the country.
The blockbuster acquisition would be historic in scope, easily pushing one of the most storied communications networks to the forefront of the entertainment and media industries. For many years, combining content creators with distribution companies was against the law.
Government regulators would likely heavily scrutinize the deal because the new company would combine content creation with wireless distribution, an integration that might raise the ire of anti-trust activists. Analysts already wonder if AT&T would restrict the use of its network for content companies not owned by Time Warner. There is also the fear that important information, like news from CNN, might not reach non-subscribers.
At a rally Saturday in Pennsylvania, Republican presidential candidate Donald Trump criticized the deal.
“Deals like this destroy democracy,” Trump said, claiming that such a merger would not occur if he were elected.
Democratic presidential nominee Hillary Clinton has claimed in the past that her administration would heavily inspect such giant deals.