Image copyrightAFPImage captionThe deal is believed to be
the biggest so far in the world this year
The US telecoms giant AT&T has announced that it will
buy entertainment group Time Warner for nearly $86bn (£70bn).
The deal was agreed at a meeting of the two boards on
Saturday but will still need to be approved by regulators.
Correspondents say it is the biggest deal in the world this
year.
It reflects the desire of the telecoms company to acquire
content to stream over its high-speed network and attract more online viewers.
If the deal is approved by regulators, AT&T would gain
control of CNN and the HBO TV network, in addition to the Warner Bros film
studio and other prized media assets.
AT&T CEO Randall Stephenson said he did not anticipate
any regulatory obstacles to the merger, saying any concerns could be overcome
if concessions were made.
"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," he said.
The deal is likely to be closely scrutinised by US antitrust
regulators, as AT&T is already the third largest cable TV provider in the
US.
An
AT&T statement said that the aim of the deal is to give
customers "unmatched choice, quality, value and experiences that will
define the future of media and communications" and the new company will
"lead the next wave of innovation in converging media and communications
industry".
Republican presidential nominee Donald Trump has said he
will block the deal if he is elected.
 |
| Revenue from HBO, which shows Game of Thrones, contributes about 18% of Time Warner's total revenue |
"It's too much concentration of power in the hands of
too few," he said on Saturday, before the deal was confirmed.
AT&T will pay $107.50 for each Time Warner share, in a
combination of cash and stock, worth $85.4bn overall, according to a statement.
AT&T said it expected to close the deal to be completed
by the end of 2017.
Other media company shares, including Discovery, AMC,
Netflix and CBS, recently rose as investors speculated that a deal could spark
a fresh wave of takeovers and mergers among media and technology companies.
AT&T, which has a market value of about $238bn, has
already made moves to turn itself into a media powerhouse, buying satellite TV
provider DirecTV last year for $48.5bn.
Time Warner chief executive Jeff Bewkes has, however,
resisted selling in the past. The company rejected an $80bn offer from
Twenty-First Century Fox Inc in 2014.
The deal gives AT&T access to a major producer of
content as it seeks to diversify away from its core telecoms business. Rival
Verizon is currently in negotiations to buy Yahoo and has already bought AOL,
owner of Huffington Post.
Some analysts, however, question whether AT&T needs to
mount a complete takeover of Time Warner.
No comments:
Post a Comment