AT&T To Acquire Media Giant Time Warner For More Than $85 Billion AT&T and Time Warner agreed Saturday to an $85 billion merger that, if approved by federal regulators, would create a mammoth media and telecommunications company.
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AT&T To Acquire Media Giant Time Warner For More Than $85 Billion

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AT&T To Acquire Media Giant Time Warner For More Than $85 Billion

AT&T To Acquire Media Giant Time Warner For More Than $85 Billion

AT&T To Acquire Media Giant Time Warner For More Than $85 Billion

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  • <iframe src="https://www.npr.org/player/embed/499042376/499042377" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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AT&T and Time Warner agreed Saturday to an $85 billion merger that, if approved by federal regulators, would create a mammoth media and telecommunications company.

RACHEL MARTIN, HOST:

It is one of the biggest media mergers in years. AT&T announced last night that it will buy Time Warner, the owner of CNN and HBO, for about $85 billion. The deal was approved by the boards of the two companies yesterday. It still has to be approved by regulators. We're joined from our studios in New York by NPR's Jim Zarroli to talk about all this. Good morning, Jim.

JIM ZARROLI, BYLINE: Good morning, Rachel.

MARTIN: What did AT&T say about the deal and why it wants it to happen, what it hopes to get out of it?

ZARROLI: Well, in its statement, it said a lot of the usual things companies say with deals like this. The CEO of AT&T, Randall Stephenson, said (reading) this is the perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for everyone. I mean, the thing is AT&T is a big communications company. It has, you know, wireless business and landline and a lot of digital and internet customers - millions of customers, really. But a lot of these are mature businesses. They're not going to grow. So, you know, there are all these changes taking place in the media world, and AT&T is basically just trying to get out in front of them.

MARTIN: All right, so how does this deal do that?

ZARROLI: Well, you know, the way people get content has really changed. They're - you know, they're cutting the cord on cable. They're getting programming through smartphones and wireless devices. So AT&T has this vision of, you know, this giant network that lets customers see the programs they want on any device any time that they want. It says that their customers really want this, that they're - they want to be able to access programs when they want them.

MARTIN: So what does AT&T get by folding Time Warner into this vision?

ZARROLI: Well, Time Warner, as you know, is a content provider. It - you know, it owns Warner Bros. Studios. It owns HBO and TNT and CNN. And so it has a lot of really popular programming like, you know, "Game Of Thrones" and the "Harry Potter" movies.

MARTIN: Yeah.

ZARROLI: So presumably, that gives AT&T a leg up. But this is really a return to the idea of, you know, bringing content and distribution together somehow, which the media had sometimes - has sometimes seemed to be moving away from. But really, again, I think it's just an effort by these big companies to be positioned to react to the changes taking place as well as possible.

MARTIN: So as we noted, the merger was approved by the boards of the companies yesterday. But this is complicated. It's a big deal. When will it actually go through?

ZARROLI: Well, it's going to take a while. Probably not at least until the - you know, the end of next year because there's going to be the usual regulatory approval process. The Justice Department has to approve it. There's already a sense, I think, among regulators that they have been quick - too quick to approve deals like this in the past, such as, you know, the Comcast-NBCUniversal deal. So there is bound to be something of a fight over this.

You're already hearing, you know, some criticism from consumer groups that this - these kinds of deals just concentrate too much media power in the hands of a big company. And actually, Donald Trump, you know, the Republican presidential nominee, of course, said basically the same thing on the campaign trail yesterday. He said if he's president, he will reject the deal. There hasn't been any word from the Clinton campaign on that.

MARTIN: NPR's Jim Zarroli breaking it down for us. Thanks so much, Jim.

ZARROLI: You're welcome.

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AT&T Reaches Deal To Buy Time Warner For More Than $85 Billion

Time Warner is heading for another merger — this time with AT&T, in a deal that was announced Saturday. Here, the company's headquarters at New York City's Columbus Circle. Andrew Burton/Getty Images hide caption

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Andrew Burton/Getty Images

Time Warner is heading for another merger — this time with AT&T, in a deal that was announced Saturday. Here, the company's headquarters at New York City's Columbus Circle.

Andrew Burton/Getty Images

Updated at 10 p.m.

AT&T has announced it's buying Time-Warner in a cash-and-stock deal worth more than $85 billion, uniting one of the country's largest communications companies with a major content provider.

The deal was formally approved by the boards of both companies on Saturday.

"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," said AT&T CEO Randall Stephenson, who will head the new company, in a statement. "It's a great fit, and it creates immediate and long-term value for our shareholders."

Dallas-based AT&T will pay $107.50 for each share of Time-Warner stock.

AT&T is a major provider of internet, wireless and telecommunications services to millions of people. By acquiring Time-Warner, owner of CNN, HBO and Warner Bros. studios, it will have access to a vast library of content that includes the Harry Potter franchise and "Game of Thrones."

The merger comes at a time when consumers—especially young ones—are increasingly eschewing cable TV and watching programming on their smartphones and wireless devices.

In its statement AT&T said the deal would leave it better positioned to capitalize on the changes.

"The new company will deliver what customers want — enhanced access to premium content on all their devices, new choices for mobile and streaming video services and a stronger competitive alternative to cable TV companies," the statement said.

AT&T is anxious to find new sources of revenue in part because its other businesses, such as wireless, aren't growing the way they once did.

"AT&T faces a tough 2017. While competition is generally tame within the wireless industry, many believe the dominant operators are about to enter a prolonged phase of share donation to Sprint and T-Mobile," wrote Walter Piecyk of the research firm BTIG.

This isn't the first time Time-Warner was part of a historic media merger. In 2000 it was acquired by AOL, in a deal that promised to fundamentally transform the media landscape but turned into one of the biggest disasters in corporate history (from 2003: AOL Posts Record $99-Billion Loss).

The size and scope of the AT&T deal, which has to be approved by the Justice Department, is already raising eyebrows in Washington.

"Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny," said U.S. Senator Richard Blumenthal. "I will be looking closely at what this merger means for consumers and their pocketbooks."

On the campaign trail Saturday, Republican presidential nominee Donald Trump said he would block the deal if he wins the election.

"It's too much concentration of power in the hands of too few," said Trump.