Jack Quann
Jack Quann

10.40 23 Oct 2016


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US telecoms firm AT&T is to buy media group Time Warner for US$85.4bn (€78.4bn).

The agreement is a stock-and-cash transaction valued at US$107.50 (€98.75) per share. It has also been approved unanimously by the boards of directors of both companies.

In a statement, Time Warner says: "The deal combines Time Warner's vast library of content and ability to create new premium content that connects with audiences around the world, with AT&T's extensive customer relationships, world’s largest pay TV subscriber base and leading scale in TV, mobile and broadband distribution."

Time Warner's portfolio of assets includes Warner Bros motion picture studio, news network CNN and HBO - which produces TV shows such as 'Game of Thrones' and 'Sex and the City'.

Its film franchises include Harry Potter, DC Entertainment, and Lego - and its TV series productions feature 'The Big Bang Theory' and 'Gotham'.

Randall Stephenson, CEO and chairman of AT&T, said: "This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers".

"Our TV, mobile and broadband distribution and direct customer relationships provide unique insights from which we can offer addressable advertising and better tailor content".

Time Warner chairman and CEO, Jeff Bewkes, added: "This is a great day for Time Warner and its shareholders. Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalise on the tremendous opportunities created by the growing demand for video content.

"That’s been one of our most important strategic priorities and we’re already making great progress — both in partnership with our distributors, and on our own by connecting directly with consumers."

The move comes in the face of challenges facing media companies from the decline of conventional cable TV - as consumers increasingly turn to streaming on mobile devices.

The tie-up of the two media giants, together said to be worth over US$300bn (€275.6bn) in market value, is certain to face tough scrutiny from anti-trust regulators because of potential ripple effects across media platforms.

The transaction is expected to close before the end of 2017 - however it is subject to approval by Time Warner shareholders and review by the US Department of Justice.

Time Warner rejected an offer of more than US$75bn (€68.9bn) two years ago from 21st Century Fox, saying the price was too low.

It has had a previous troubled merger with US internet group AOL in 2000 - which ended in a split in 2009.

Additional reporting: IRN


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