AT&T Announces They Will Buy Time Warner
On Saturday evening AT&T announced the move to buy Time Warner in an $85 billion deal. The buy will help AT&T expand beyond just wireless and Internet service into programming.
Time Warner is the owner of CNN, TNT, HBO, the Warner Bros. studio, and other channels and websites.
AT&T is one of the country’s largest providers of wireless phone and internet services, dating all the way back to the invention of the telephone in 1876. Adding to their program move the company just recently bought DirectTV satellite TV business. This is a way for the company to move in on those looking to cord cut from basic cable plans.
Though the announcement has been made it could take up to a year for the deal to be reviewed by government regulators, which it is subject to.
The company will pay $107.50 a share- a big premium over where Time Warner stock was trading last week, including Time Warner’s debt, the deal’s value is $109 billion.
Executives from the two companies have been in talks for several months and word of the possible deal leaked out on Thursday. AT&T executives said they were eager to finish the talks before the market opens on Monday morning.
AT&T-Time Warner is a union of programming and distribution.
Per the Wall Street Journal, AT&T Chief Executive Randall Stephenson would head the new company. The companies said Time Warner Chief Executive Jeff Bewkes would stay for an interim period following the close of the deal to help with the transition.
The deal represents a victory for Mr. Bewkes of Time Waner. He took some heat from investors for rebuffing a takeover bid from 21st Century Fox two years ago.
“This is a natural fit between two companies with great legacies of innovation that have shaped the modern media and communications landscape,” said Mr. Bewkes, per the Wall Street Journal.
Bank of America Merrill Lynch is expected to provide AT&T with a $15 billion bridge loan.