AT&T Buying Time Warner for $85 Billion

Just one day after being reported as a “possibility” in the Wall Street Journal, it’s been confirmed: AT&T is buying Time Warner for $85 billion in cash and stock.

AT&T, one of the US’ largest telecom providers, already has television and Internet in millions of homes via Uverse and satellite services, plus a substantial mobile userbase already consuming Time Warner’s TV and film content—which includes HBO & Warner Bros, and the NCAA March Madness tournament.

Since it split from AOL, Time Warner has been on the market for a new home for some time. In 2014, the media giant passed up an $80 billion offer from 20th Century Fox; and, recently, even Apple was rumored to be interested in offloading some of their considerable cash on the company.

The deal, if approved, will be AT&T’s second major acquisition in just over a year, after the company scooped up satellite TV provider DirecTV in the Summer of 2015. AT&T expects that the deal will be complete by the end of 2017; however, this may not be an easy sell. Though both company’s boards will undoubtedly give the go-ahead for the merger, federal regulators are likely to comb over this agreement down to the last detail, to ensure AT&T isn’t setting itself up for unfair competitive practices.

AT&T does have the recent Comcast-NBC Universal merger on its side, which did take a little over a year from the time it was announced (fitting quite nicely into AT&T’s anticipated timeline). However, as the company saw when their proposed buy-out of T-Mobile was eventually abandoned after legal and PR issues back in 2011—anything is possible.

It’s not tough to imagine why AT&T is interested in acquiring Time Warner, though. Comcast/NBC merger aside, top AT&T competitor Verizon has been on a mass media buying spree as of late—picking up AOL and Yahoo (should the latter not fall apart, that is). AT&T having control of both the production & distribution side of shows like HBO’s Westworld opens up significant second-tier advertising options, especially in the form of digital content.

Worth noting, Time Warner Cable is an independent entity from Time Warner, and is therefore not included in the terms of this agreement.

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