AT&T agrees to buy Time Warner in over $80 bn deal: banking source

AT&T agrees to buy Time Warner in over $80 bn deal: banking source

NEW YORK - Telecom giant AT&T has struck a deal to buy entertainment company Time Warner for more than $80 billion, to add in-house content to its distribution services, a banking source familiar with the negotiations said Saturday.

Telecom giant AT&T has struck a deal to buy entertainment company Time Warner for more than $80 billion, to add in-house content to its distribution services

An official announcement is expected before Monday's trading session on Wall Street.

AT&T is the second-largest US wireless carrier and third-largest cable TV provider in the United States, while Time Warner controls a valuable stable of entertainment content suppliers, including Warner Bros. film and TV studios, the HBO television production group, cable news giant CNN, and the TNT and TBS cable channels.

A union of the two media titans -- together worth more than $300 billion in market value -- is certain to face tough scrutiny from antitrust regulators because of potential ripple effects across media platforms.

A deal could price Time Warner at more than $105-110 per share, or more than $80 billion, the source said.

Analysts believe the transaction also could prompt other big deals involving large media companies.

The Wall Street Journal reported Friday that Apple had approached Time Warner about a possible deal a few months ago, but the talks failed to make progress. Apple is continuing to monitor the negotiations, the newspaper said.

The deal comes amid challenges facing media companies from the decline of conventional cable television as consumers increasingly turn to streaming on mobile technology.

AT&T had $147 billion in revenues in 2015 while Time Warner reported $28 billion.

AT&T has pursued an aggressive expansion, paying almost $50 billion to buy satellite television provider DirectTV in 2015.

Time Warner shares soared 7.8 percent Friday following reports of the talks. They were up another 4.9 percent in afterhours trading on fresh reports suggesting the two sides were even closer to a deal.

AT&T dropped 3.0 percent during regular-hours trading Friday, and fell another 0.7 percent in after-hours trade.

Do you like the content of this article?
COMMENT