Creating what it is called to be one of the largest telecom-media acquisitions, the U.S. wireless carrier AT&T has reached an agreement to buy Time Warner Inc. for $85.4 billion. AT&T will pay $107.50 a share. The deal is expected to close by the end of 2017.
As per the leadership is concerned, AT&T Chief Executive Officer Randall Stephenson will head the company. Time Warner’s CEO Jeff Bewkes will remain in the company for a short period , especially to assist the transactions.
The acquisition will enable AT&T to offer an online-video bundle, unlike the traditional pay-television package, becoming the first U.S. wireless company to compete with the cable companies. Time Warner has a strong media line-up, including CNN, TNT, HBO channel and Warner Bros film and TV studio. In a nutshell, Time Warner will give AT&T entry into entertainment, news, and sports. AT&T targets for both advertising and subscription-based business that will help pay for the cost of content creation.
“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,” said AT&T Chief Executive Stephenson in a release. There are regulatory approvals awaiting the deals, which the companies believe can be solved by favorable conditions. Considering the scale of the transactions, the deal is anticipated to undergo a close scrutiny.
“This is a perfect match for two companies with complementary strengths who can bring a fresh approach to how the media and communications industry work for customers, content creators, distributors, and advertisers,” claimed Stephenson.
“With great content, you can build truly differentiated video services, whether it’s traditional TV, OTT or mobile. Our TV, mobile and broadband distribution and direct customer relationships provide unique insights from which we can offer addressable advertising and better tailor content. It’s an integrated approach and we believe it’s the model that wins over time,” he added.