Will AT&T Buy Time Warner in $70B Deal?

It looks like American telecommunications company AT&T might be set to buy Time Warner in what might turn out to be a $70 billion deal. And they might do it as early as this approaching weekend.

Indeed, it has been reported that AT&T is in advanced talks to acquire Time Warner, the company that is home to major cable networks like CNN, major premium networks like HBO, and a host of other popular film and television outlets, including NBA Basketball games.  Outlets like, you know, Warner Brothers movie studio (where they filmed immensely popular series like “The Sopranos” and “Sex and the City.”

Should this deal succeed, the Texas-based AT&T would become even larger than it already is, combining its mobile and broadband services with yet more satellite television broadcast capabilities and Time Warner’s massive entertainment empire.

It has been known for some time that AT&T CEO Randall Stephenson was already looking to add more content and more original programming to their catalog as a big part of his new plan to transform the brand into a media/entertainment giant.

Media industry veteran Peter Chermin runs an online video joint venture with AT&T, and he says, “There’s a lot that’s attractive about Time Warner; I think they’re both great companies,” though he also reports that he did not know anything about this pending deal.

Indeed, it is highly likely that AT&T kept this negotiation quiet, as it appears that investors are going to be asked to take on more of the debt, as well as a potentially diluted equity stake. And this, just after the company borrowed money to pick up satellite television programming provider DirecTV for $48.5 billion—to launch a new service called “DirectTV Now”. At the time, that was AT&Ts biggest deal in more than a decade.

Accordingly, Bloomberg Intelligence analyst, John Butler, comments, “With the pending launch of the DirecTV Now OTT app, it might make sense to move onto content ownership, but Time-Warner is an awfully big first step into the content world.”

With all that, though, it appears that investors are uncertain: Time Warner shares, of course, jumped 10 percent—to $91.29—while AT&T shares slid roughly 2 percent—to $37.96.

 

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