Digital Transformation

AT&T seals $85.4 billion deal to buy Time Warner: Trump says he will block deal if he becomes president

By Noel Young | Correspondent

October 21, 2016 | 4 min read

AT&T Inc. has reached an agreement to acquire Time Warner Inc. for $84.5 billion, according to Bloomberg - but Donald Trump has said he may block the deal if he becomes president.

He said such media combinations give too much power to too few companies

The deal will create "a media behemoth that offers TV, wireless and the programming that goes with it," said Bloomberg. CNN Warner Bros and HBO are part of the The Time Warner package.

$86 billion deal?

$85 billion deal

The deal will reportedly be valued at about $110 a share and structured as a 50-50 cash and stock split.

It will be the biggest of the year, surpassing Bayer AG’s $66 billion takeover of U.S. seed giant Monsanto Co., announced in May.

Buying Time Warner will give AT&T -- already a top U.S. supplier of pay-TV, mobile phone and home internet services -- premium entertainment programming to offer its millions of subscribers, from HBO to the NBA to the Cartoon Network, said Bloomberg.

CEO Randall Stephenson is transforming the Dallas-based phone company into a media and entertainment giant, and now has one of Hollywood’s top film and TV producers in his crosshairs.

An agreement could be approved Sunday and announced as soon as Monday, according to the the people familiar with the matter. A note of caution from Bloomberg: "Talks are ongoing and a deal could still fall through, the people said."

Time Warner closed at $89.48 on Friday in New York, giving it a market value of about $70 billion. A price of $110 a share would reflect a premium of about 23 percent. The stock jumped as much as 5 percent in after-hours trading. AT&T closed at $37.49, giving it a market value of about $231 billion.

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Talks between the companies accelerated since Bloomberg first reported Thursday that executives had met in recent weeks to discuss potential business combinations, according to another person familiar.

Part of AT&T’s concern was that other suitors such as Alphabet Inc.’s Google or Apple Inc. could jump in.

Apple was said to be monitoring the situation as the deal neared.

The WSJ said Apple approached Time Warner about pursuing a combination a few months ago, and though the discussions didn’t progress beyond a preliminary stage,

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