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AT&T to buy Time Warner for $85bn

AT&T to buy Time Warner for $85bn

NEW YORK: AT&T Inc said on Saturday it had 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.

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 Nov 8 election. 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 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 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 per cent 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.

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.

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

Published in Dawn, October 24th, 2016

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