AT&T has reached an agreement in principle to buy Time Warner for about $85 billion, sources said on Friday, paving the way for the biggest deal in the world this year. The agreement would give the telecom company control of the cable TV channels HBO and CNN, the film studio Warner Bros. and other coveted media assets.

The deal, which has been agreed upon in most of its terms and could be announced as early as Sunday, would be one of the largest in recent years in the sector as telecommunications companies look to combine content and distribution to capture customers who are replacing traditional pay-TV packages with more streamlined offerings and online delivery.

AT&T, which sells wireless phone and broadband services, has already made moves to turn itself into a media powerhouse, buying the satellite TV provider DirecTV last year for $48.5 billion.

It also in 2014 entered a joint venture, Otter Media, with the Chernin Group to invest in media businesses and has rolled out video streaming services.

AT&T will pay $110 per Time Warner share, or about $85 billion overall, sources said.

Time Warner’s shares rose almost 8 percent in regular trading, and a further 3.4 percent after hours, to $92.50, giving it a market value of about $73 billion. AT&T closed down 3 percent at $37.49.

Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros. film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 percent stake in the video streaming site Hulu.

Time Warner Chief Executive Jeff Bewkes rejected an $80 billion offer from 21st Century Fox in 2014, but sources said on Friday that the former suitor had no plans to renew its bid.

The Wall Street Journal reported on Friday that Apple approached Time Warner a few months ago about a possible merger.

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. And new mobile technology, including next-generation 5G networks, could make a content tie-up especially attractive for wireless providers.

“We think 5G mobile is coming, we think 5G mobile is an epic game-changer,” Rich Tullo, director of research at Albert Fried & Co., said in a note, adding that mobile providers would be in a position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

Cowen and Co. analyst Doug Creutz questioned the strategy of buying content instead of licensing it.

“What does it get them that they can’t get by licensing Time Warner content and at a much cheaper price than buying the whole company?” Creutz asked, noting it is unclear what savings could be gained from “stapling distribution and content together. It’s been tried. It never works.”

AT&T would likely be able to win U.S. antitrust approval for the deal, some experts said, but it is unclear whether certain conditions would be needed to win that approval.

The U.S. Justice Department “will look at it but they won’t stop it,” said Darren Bush, who teaches antitrust issues at the University of Houston. Bush predicted regulators as a matter of course would make a second request for information, meaning the review would last several months.

Andre Barlow, an antitrust lawyer at the law firm Doyle, Barlow and Mazard, noted that the government may worry about whether other cable and internet companies would continue to have access to Time Warner content like HBO and CNN.

The media industry has been seen as ripe for consolidation. Several stocks rose on the news, including Netflix, which closed up about 3.4 percent, and Discovery Communications, which ended up 3.6 percent. </s> AT&T is in advanced discussions to acquire media conglomerate Time Warner, and a deal could come as early as this weekend, the Wall Street Journal reported on Friday.

The talks have come together quickly and revolve around a cash-and-stock deal which would be one of the largest in the sector in recent years as telecom companies make a grab for media providers to acquire content, the Journal reported.

Time Warner shares jumped 11.4 per cent to $92.40 in late Friday morning trading. AT&T shares were down 3.3 per cent at $37.39.

Time Warner, which has a market capitalisation of about $65 billion, is an attractive target for AT&T, which has a market capitalization of about $238 billion, because of its premium cable channel HBO, the CNN news network, film studio Warner Bros and other media assets.

AT&T, which sells wireless phone and broadband services, has already made moves to turn itself into a media powerhouse, buying satellite TV provider DirecTV last year for $48.5 billion.

Owning content gives cable and telecom companies leverage as customers demand smaller, hand-picked cable television offerings or dispense with cable altogether and watch shows via the internet.

Time Warner chief executive Jeff Bewkes has not been willing to sell the company in the past. The company rejected an $80 billion offer from Twenty-First Century Fox in 2014.

Time Warner was not immediately available for comment. AT&T declined to comment.

Bloomberg reported on Thursday that executives of both companies had discussed various business strategies, including a possible merger, in recent weeks. </s> AT&T has agreed to buy Time Warner Inc for $85.4 billion, the boldest move yet by a telecommunications company to acquire content to stream over its network to attract a growing number of online viewers.

The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The tie-up will likely face intense scrutiny by US antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.

AT&T will pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.

Dallas-based AT&T said the US Department of Justice would review the deal and that the companies were determining which Federal Communications Commission licenses, if any, would be transferred to AT&T in the deal.

US lawmakers were already worried about cable company Comcast Corp’s $30 billion acquisition of NBCUniversal, and several argued for close regulatory scrutiny of the AT&T deal.

“Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny,” said US Senator Richard Blumenthal, Senate Judiciary Committee member and former attorney general of Connecticut. “I will be looking closely at what this merger means for consumers and their pocketbooks.”

US Republican presidential nominee Donald Trump said at a rally he would block any AT&T-Time Warner deal if he wins the November 8th election. Mr Trump has complained about media coverage of his campaign, especially by Time Warner’s CNN.

“It’s too much concentration of power in the hands of too few,” said Mr Trump.

Representatives of his Democratic rival, Hillary Clinton, did not immediately respond to a request for comment.

AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse. It bought satellite TV provider DirecTV last year for $48.5 billion.

It had about 142 million North American wireless subscribers as of June 30th, and about 38 million video subscribers through DirecTV and its U-verse service.

New York-based Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the Batman and Harry Potter film franchises. The company also owns a 10 percent stake in video streaming site Hulu. The HBO network alone has more than 130 million subscribers.

AT&T Chief Executive Officer Randall Stephenson told reporters on a conference call that owning Time Warner and all its content will provide a greater competitive advantage than just continuing to license it.

Talks between Stephenson and Time Warner CEO Jeff Bewkes began in August, they said. “Jeff and I both had a vision that if you put these two together, you could innovate much faster,” said Stephenson.

Mr Bewkes, who rejected an $80 billion offer from Twenty-First Century Fox Inc in 2014, will stay on for an open-ended period of time to help with the integration.

Mr Stephenson called the deal “vertical” rather than “horizontal” and played down regulatory hurdles.

“There’s no competitor being removed from the marketplace, there’s no competitive harm that is being rendered by putting these two companies together,” said Stephenson. “So any concerns by the regulators, we believe, will be adequately addressed by conditions, that’s our anticipation.”

Time Warner must pay AT&T $1.725 billion if it finds a different buyer. If regulators block the deal, AT&T must pay Time Warner $500 million, according to people familiar with the deal.

The telecom and media sectors have been consolidating. In addition to Comcast’s purchase of NBCUniversal, AT&T’s wireless rival Verizon Communications Inc is in the process of buying internet company Yahoo Inc for about $4.8 billion.

AT&T said it would finance the cash portion of the purchase with new debt and cash on its balance sheet. AT&T said it has an 18-month commitment for an unsecured bridge term facility for $40 billion. </s> A federal judge has approved AT&T's $85 billion deal to acquire Time Warner. How will the decision impact other telecom and media giants, along with their customers? </s> AT&T Inc is set to announce as early as Saturday an $85-billion deal to buy Time Warner Inc., sources familiar with the matter said, giving the telecom company control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.

The deal would be the biggest merger in the world this year and one of the largest in recent years in the sector. Telecommunications companies have been looking for quality content to stream over their high-speed networks, hoping to attract a growing group of viewers who want to ditch traditional pay-TV packages in favour of streamlined offerings or watching online.

AT&T will pay $110 per Time Warner share, half in cash and half in stock, worth about $85-billion overall, sources told Reuters. It will need to line up financing to pay for the deal, since it only has $7.2-billion in cash on hand. This could put pressure on its credit rating as it already had $120-billion in net debt as of June 30, according to Moody’s.

The boards of the two companies were meeting on Saturday to approve the deal, sources told Reuters.

A deal would likely face intense scrutiny by U.S. antitrust regulators. The government may worry that other cable and internet companies would be denied access to Time Warner content like HBO and CNN, said Andre Barlow, an antitrust lawyer at the law firm Doyle, Barlow & Mazard.

U.S. Republican presidential nominee Donald Trump, who has complained about what he sees as unfair coverage of his campaign, said at a rally on Saturday he would block any AT&T-Time Warner deal if he wins the Nov. 8 election.

“It’s too much concentration of power in the hands of too few,” Trump said.

AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse. It bought satellite TV provider DirecTV last year for $48.5-billion.

In 2014, AT&T entered a joint venture, Otter Media, with the Chernin Group to invest in media businesses, and it has rolled out video streaming services.

Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 per cent stake in video streaming site Hulu.

Time Warner Chief Executive Officer Jeff Bewkes rejected an $80-billion offer from Twenty-First Century Fox Inc <FOXA.O> in 2014, but sources said on Friday that the former suitor had no plans to renew its bid.

The Wall Street Journal reported on Friday that Apple Inc <AAPL.O> approached Time Warner a few months ago about a possible merger.

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. New mobile technology including next-generation 5G networks could make a content tie-up especially attractive for wireless providers.

“We think 5G mobile is coming, we think 5G mobile is an epic game-changer,” Rich Tullo, director of research at Albert Fried & Company, said in a research note, adding that mobile providers would be in position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

Dallas-based AT&T and New York-based Time Warner did not immediately return calls for comment. </s> Time Warner's stock soared nearly 10% Friday on reports that telecom and media giant AT&T may make a takeover bid for the company. A deal would be the latest example of convergence in the media and tech world, and it could usher in another wave of consolidation in the sector.

The Wall Street Journal, citing anonymous sources, said that a deal could happen as soon as this weekend. (Time Warner is the parent company of CNN.)

Shares of AT&T were down 3% after the news broke.

AT&T declined to comment to CNNMoney, and Time Warner (TWX) did not immediately return requests for comment.

There was no indication how much AT&T was willing to pay for Time Warner. AT&T reportedly would use cash and its own stock to finance the deal. It is currently worth $230 billion, while Time Warner's market value is about $70 billion.

Larry Haverty, associate portfolio manager with The Gabelli Multimedia Trust (GGT) -- a fund that owns shares of both AT&T and Time Warner -- said he thinks it is "highly likely" the two companies will combine.

He adds that AT&T could wind up paying as much as $110 a share for Time Warner. That would be almost 25% higher than the stock's current price, and would value Time Warner at more than $85 billion.

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But any AT&T-Time Warner deal would be subject to a lengthy regulatory review process.

That's because an acquisition of Time Warner would cement AT&T (T, Tech30) as one of the country's dominant media companies, with significant control over both programming and the distribution of that programming.

AT&T recently completed the acquisition of satellite TV provider DirecTV, which has access to 20 million households in the United States and also holds the lucrative rights to the National Football League's Sunday Ticket package.

AT&T's broadband U-Verse service has another 5 million subscribers in the U.S. AT&T also still owns a huge wireless and landline phone business as well. This is the company many still know by its nickname Ma Bell after all.

With the addition of Time Warner, AT&T would gain control of household names in the media world: CNN, HBO, a collection of valuable cable channels like TNT and Cartoon Network and the Warner Bros. movie and TV studio.

A purchase of Time Warner would immediately make AT&T a global media giant, on par with cable company Comcast (CMCSA) -- which also owns NBCUniversal and DreamWorks Animation -- as well as Disney (DIS), the parent of ESPN, ABC, Lucasfilm, Pixar and Marvel.

AT&T CEO Randall Stephenson has made it known that he wants AT&T to control more programming. And the Comcast-NBC merger has proven that a content distribution firm can thrive by owning a media firm as well.

Bloomberg reported on Thursday that talks between AT&T and Time Warner have been taking place for several weeks.

Time Warner CEO Jeff Bewkes is a "willing seller" if he "gets an offer he thinks is fair," Bloomberg said, citing an anonymous source.

This isn't the first time that Time Warner has been in play. Rupert Murdoch's Fox (FOXA) made an offer for Time Warner in 2014 but withdrew the bid after it became clear that Time Warner was not interested in a deal.

At the time, a senior source involved in the bid said Murdoch was the wrong bidder at the wrong time.

"Wait two or three years," the source said, "and Time Warner will be on the market."

Sure enough, two years later there has been anticipation on Wall Street about a potential Time Warner transaction.

Analysts believe Time Warner's portfolio of entertainment and news businesses are a logical fit with several potential buyers, including AT&T. Gabelli's Haverty said an AT&T-Time Warner would make Stephenson's vision "strategically complete."

It is also becoming clear that content can be very valuable to large technology firms as well.

There were rumors circulating on Wall Street earlier this year that Apple (AAPL, Tech30) may be interested in making a bid for either Time Warner or Netflix (NFLX, Tech30).

Google parent Alphabet (GOOGL, Tech30) and Amazon (AMZN, Tech30) have also been mentioned in vague trader chatter as possible acquirers of Time Warner or other big media companies.

But Haverty doesn't think that one of the big tech firms will buy Time Warner.

He notes that software firm Salesforce (CRM, Tech30) recently faced a shareholder revolt when it was rumored to be seriously considering a bid for struggling social media company Twitter (TWTR, Tech30) -- and Salesforce ultimately decided against a deal.

Haverty said Apple or Alphabet could face similarly disgruntled investors if either proposed a purchase of Time Warner.

Still, any deal for Time Warner could kick off another wave of mergers in the media sector.

CBS (CBS), which also owns the cable network Showtime as well as the Eye Network, is already said to be in talks to reunite with Viacom (VIAB), the owner of the Paramount movie studio, Nickelodeon and MTV.

Sumner Redstone and his family control both companies.

But Dave Novosel, a media analyst for corporate bond research firm Gimme Credit, noted in a report earlier this month that CBS might be more interested in selling to Time Warner instead of merging with Viacom.

"We think that CBS would rather combine with Time Warner," he wrote, adding that "Time Warner would provide an attractive film business, which CBS does not have but presumably would like" and that "HBO would be a nice complement to Showtime."

Whether or not Time Warner wants to be an acquirer as opposed to a seller is debatable.

A Time Warner acquisition may cause Fox and Disney to consider big deals of their own too.

To that end, shares of three other big cable programming companies -- AMC Networks (AMCX), Discovery Communications (DISCA) and Scripps Networks Interactive (SNI) -- all surged Friday as well.

If Time Warner is sold, it would mark the end of an era for what was once an even larger media powerhouse.

Time Warner controversially merged with AOL back in 2000, a deal that many still view as one of the least successful in corporate history.

But under the leadership of Bewkes, Time Warner has spun off AOL (now owned by Verizon (VZ, Tech30)), Time Warner Cable (now a part of Charter Communications (CHTR)) and the magazine and book publishing unit Time Inc (TIME).

"Bewkes has created a pure play content firm that may only be rivaled by Disney. Selling to AT&T would answer the question of what's next for Time Warner," Haverty said. </s> NEW YORK — AT&T Inc is set to announce an $85 billion deal to buy Time Warner Inc on Saturday, sources familiar with the matter said, the boldest move yet by a telecommunications company to acquire content to stream over its high-speed network in an attempt to appeal to a growing number of online viewers.

The biggest deal in the world this year would give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. It would likely face intense scrutiny by U.S. antitrust regulators worried that AT&T might try to limit distribution of Time Warner material.

AT&T will pay $110 per Time Warner share, half in cash and half in stock, worth about $85 billion overall, sources told Reuters.

The Dallas-based company will need to line up financing to pay for the deal, since it has only $7.2 billion in cash on hand. This could put pressure on its credit rating as it already had $120 billion in net debt as of June 30, according to Moody’s.

The boards of the two companies were meeting on Saturday to approve the deal, sources told Reuters.

U.S. Republican presidential nominee Donald Trump, who has complained about what he sees as unfair coverage of his campaign, said at a rally on Saturday he would block any AT&T-Time Warner deal if he wins the Nov. 8 election.

“It’s too much concentration of power in the hands of too few,” said Trump.

Representatives of his Democratic rival, Hillary Clinton, did not immediately respond to a request for comment.

The American Cable Association, which represents independent U.S. cable TV operators, said on Saturday that “combining valuable content with pay-TV distribution causes harm to consumers and competition in the pay-TV market,” and urged regulators to closely examine the deal.

AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse. It bought satellite TV provider DirecTV last year for $48.5 billion.

It had about 142 million North American wireless subscribers as of June 30, and about 38 million video subscribers through DirecTV and its U-verse service.

New York-based Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 percent stake in video streaming site Hulu. The HBO network alone has more than 130 million subscribers.

AT&T is following in the footsteps of cable company Comcast Corp, which acquired NBCUniversal for about $30 billion and DreamWorks Animation in a bid to control how television shows and movies are made and how they are delivered to viewers.

Meanwhile, AT&T’s wireless rival Verizon Communications Inc is in the process of buying internet company Yahoo Inc for about $4.8 billion.

Time Warner Chief Executive Officer Jeff Bewkes rejected an $80 billion offer from Twenty-First Century Fox Inc in 2014. Sources said on Friday that the former suitor had no plans to renew its bid.

The Wall Street Journal reported on Friday that Apple Inc approached Time Warner a few months ago about a possible merger.

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. New mobile technology including next-generation 5G networks could make a content tie-up especially attractive for wireless providers.

“We think 5G mobile is coming, we think 5G mobile is an epic game-changer,” Rich Tullo, director of research at Albert Fried & Co, said in a research note, adding that mobile providers would be in position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

AT&T and Time Warner did not respond to requests for comment. </s> Time Warner's stock soared nearly 10% Friday on reports that telecom and media giant AT&T may make a takeover bid for the company.

The Wall Street Journal, citing anonymous sources, said that a deal could happen as soon as this weekend. (Time Warner is the parent company of CNN.)

Shares of AT&T were down 4% after the news broke.

AT&T declined to comment to CNNMoney, and Time Warner (TWX) did not immediately return requests for comment.

There was no indication how much AT&T was willing to pay for Time Warner. AT&T reportedly would use cash and its own stock to finance the deal. It is currently worth $230 billion, while Time Warner's market value is about $72 billion.

But any AT&T-Time Warner deal would be subject to a lengthy regulatory review process.

That's because an acquisition of Time Warner would cement AT&T (T, Tech30) as one of the country's dominant media companies, with significant control over both programming and the distribution of that programming.

AT&T recently completed the acquisition of satellite TV provider DirecTV, which has access to 20 million households in the United States and also holds the lucrative rights to the National Football League's Sunday Ticket package.

AT&T's broadband U-Verse service has another 5 million subscribers in the U.S. AT&T also still owns a huge wireless and landline phone business as well. This is the company many still know by its nickname Ma Bell after all.

With the addition of Time Warner, AT&T would gain control of household names in the media world: CNN, HBO, a collection of valuable cable channels like TNT and Cartoon Network and the Warner Bros. movie and TV studio.

A purchase of Time Warner would immediately make AT&T a global media giant, on par with cable company Comcast (CMCSA) -- which also owns NBCUniversal and DreamWorks Animation -- as well as Disney (DIS), the parent of ESPN, ABC, Lucasfilm, Pixar and Marvel.

Bloomberg reported on Thursday that talks between AT&T and Time Warner have been taking place for several weeks.

Time Warner CEO Jeff Bewkes is a "willing seller" if he "gets an offer he thinks is fair," Bloomberg said, citing an anonymous source.

This isn't the first time that Time Warner has been in play. Rupert Murdoch's Fox (FOXA) made an offer for Time Warner in 2014 but withdrew the bid after it became clear that Time Warner was not interested in a deal.

At the time, a senior source involved in the bid said Murdoch was the wrong bidder at the wrong time.

"Wait two or three years," the source said, "and Time Warner will be on the market."

Sure enough, two years later there has been anticipation on Wall Street about a potential Time Warner transaction.

Analysts believe Time Warner's portfolio of entertainment and news businesses are a logical fit with several potential buyers, including AT&T. It is also becoming clear that content can be very valuable to large technology firms as well.

To that end, there were rumors circulating on Wall Street earlier this year that Apple (AAPL, Tech30) may be interested in making a bid for either Time Warner or Netflix (NFLX, Tech30).

Google parent Alphabet (GOOGL, Tech30) and Amazon (AMZN, Tech30) have also been mentioned in vague trader chatter as possible acquirers of Time Warner or other big media companies.

Any deal for Time Warner could kick off another wave of mergers in the media sector.

CBS (CBS) is already said to be in talks to reunite with Viacom (VIAB), the owner of the Paramount movie studio, Nickelodeon and MTV. Sumner Redstone and his family control both companies.

A Time Warner acquisition may cause Fox and Disney to consider big deals of their own too. </s> AT&T has announced the closure of an $85 billion deal to acquire Time Warner.

On Thursday, the wireless tech giant said the takeover is now complete and will give customers a "differentiated, high-quality, mobile-first entertainment experience."

The announcement was made only a few days after US District Court Judge Richard Leon ruled that the acquisition may proceed, with no special conditions attached.

In a statement, AT&T CEO Randall Stephenson said, "We're going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors, and advertisers."

In order to finance the deal, AT&T has issued 1.185 million shares of common stock and paid $42 billion in cash. Including net debt accrued from Time Warner, AT&T now has $180.4 billion in net debt.

Under the terms of the deal, Time Warner shareholders will receive 1.4 shares of AT&T common stock, alongside $53.75 in cash per Time Warner share.

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The former chairman and CEO of Time Warner, Jeff Bewkes, will remain as a senior advisor during the transition period.

The Trump Administration will not be pleased with the news, having opposed the merger.

The US Department of Justice (DoJ) had sued to quash the deal, claiming that such a takeover would hamper competition, reduce innovation in the media and pay-TV space, and would eventually result in price hikes for consumers.

In particular, the DoJ argued that AT&T's ownership of satellite television provider DirecTV and Time Warner -- together with its Turner subsidiary -- could harm rival pay-TV companies. The DoJ has previously said the merged company could use Time Warner content as a "weapon" to hike up prices.

However, Leon ruled that the US government had failed to prove the acquisition was not permissible under antitrust rules.

The DoJ has 60 days to appeal the court's ruling, even though the acquisition has closed.

However, the US agency has not requested a freeze on the ruling while deciding whether or not to challenge the deal.
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AT&T reportedly agrees in principle to buy Time Warner for about $85 billion.