DEAL! AT & T Reaches Deal to Buy Time Warner

AT&T, which dates back to the invention of the telephone in 1876, is one of the country’s largest providers of wireless phone and Internet service. It also recently acquired the DirecTV satellite TV business has now reached a deal to buy Time Warner.

The move, announced Saturday evening, will help AT&T expand beyond wireless and Internet service into programming. Time Warner is the parent of CNN, TNT, HBO, the Warner Bros. studio, and other channels and websites.

Deal Stats:

  • The deal will be subject to a review by government regulators that could take more than a year to complete.
  • AT&T will pay $107.50 a share
  • The deal is half cash and half stock.
  • Gaining Time Warner will give AT&T entry into entertainment, news and sports.
  • The deal will also keep Time Warner out of the hands of AT&T’s huge rivals, including Verizon, Comcast, and Apple.
  • AT&T Chief Executive Randall Stephenson will head the new company
  • Jeff Bewkes will remain Time Warner CEO during the regulatory review. Afterward, he’ll stay on to “ensure a smooth transition,”
  • Time Warner has agreed to pay a $1.7 billion breakup fee if another company outbids AT&T’s offer
  • AT&T would pay $500 million if the deal gets blocked
  • Time Warner had a market capitalization of $68 billion before the Journal reported on the advanced talks
  • AT&T’s market capitalization was $233 billion
  • On Friday, Time Warner shares closed at $89.48, up 8%, while AT&T fell 3%, to $37.49
  • The last comparable merger was Comcast’s $30 billion deal for NBC Universal in 2009. The review of that acquisition involved the Justice Department and the Federal Communications Commission, and the deal was approved.

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