AT&T, Time Warner Expected to Sign Blockbuster Deal: Report (T, TWX)

The mega-deal would shake up the media landscape and create one of the largest media and communications giants in the world.

Merger

In what could be one of the biggest media deals in recent years, according to a Wall Street Journal report that references sources familiar with the situation, telecom giant AT&T Inc. (NYSE:T) has reached a deal to acquire Time Warner (NYSE:TWX) for more than $80 billion.

AT&T is expected to pay between $105 to $110 a share per TWX share in cash and stock, the Journal reported, noting that the blockbuster deal that would allow Dallas-based AT&T to gain control of massive entertainment and news brands including HBO, CNN, TNT and film studio Warner Bros, could be announced by Saturday evening as the two boards meet to approve the deal.

Like other mega media consolidations, this merger has significant implications for the internet and the entertainment industry as it would not only set a milestone in the converging media and telecom sectors but also prompt a far-reaching reordering of the industry, the Journal said.

Interestingly, earlier tech giant Apple Inc (NASDAQ:AAPL) had looked at possibly acquiring Time Warner. In fact, Eddy Cue, Apple’s senior vice president of internet software and services, brought up a potential merger in a meeting with Time Warner’s Olaf Olafsson last year, but the negotiations could not move beyond a point, the publication noted.

Time Warner closed at $89.48 on Friday in New York after spiking 8%, giving it a market cap of about $70 billion. The stock surged as much as 5% in extended trading. AT&T on the other hand, traded down nearly 3% to close at $37.49 as shareholders considered financial consequences of another expensive takeover when the company already has $120 billion in debt.

The Time Warner deal would be come a year after AT&T, the second largest US wireless company bought DirecTV, the second largest US pay-TV distributor for nearly $49 billion.

In related news, earlier Saturday, Republican presidential candidate Donald Trump said that the proposed AT&T-Time Warner deal was an example of a “power structure” rigged against both him and voters. Trump promised that under a potential GOP White House, his administration would not approve the merger.

News of a possible takeover first surfaced on Friday, when Reuters and Bloomberg reported that the AT&T-Time Warner deal could top $85 billion.

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