A deal has been reached and AT&T is willing to buy Time Warner for $105 to $110 per share resulting in an $80 billion offer. This will allow AT&T to expand its presence into the television business.
It is expected that a formal announcement will be made on Saturday night, to close the $80 billion deal. If the acquisition happens, AT&T will be expanding its business to important networks such as HBO, CNN, and TNT. The deal is facing intense scrutiny. By now, the Time Warner shares have increased about 2.76% during after-hours trading.
The AT&T- Time Warner merger
AT&T is an American multinational telecommunications company, located in Texas. It was created as one of the seven regional Bell Operating Companies in 1983. Today, it is the second largest provider of mobile telephone services.
It is also the third-largest company in Texas, after ExxonMobil and ConocoPhillips. Right now, AT&T appears to be focused on expanding its services in the TV industry. As well, it is trying to mature its services regarding the provision of Internet access.
Last year, AT&T merged with DirecTV in a $49 billion deal, to work in a new online streaming TV service, soon to be launched. What the Telecom giant is looking for is to suppress the need for DirecTV satellite dishes and offer all pay TV content over the internet, by 2020.
And now, AT&T has its sight on merging with Time Warner. The negotiations accelerated after it was reported that the companies were having talks to prevent other companies such as Apple from buying Time Warner.
Will the agreement be approved?
Though people is talking about the billionaire deal between the two companies, no official announcement has been reported. It is expected to occur within hours. The agreement will possibly include clauses about HBO, CNN, TNT, TBS, Warner Bros and theme parks.
This would be one of the largest acquisitions ever recorded in the telecom-media sector. But it has to pass the regulations. Obviously, the recent ambitions of AT&T, aiming to dominate an important amount of shares in the content and distribution industries, will surely be a concern for federal regulators.
Donald Trump has pronounced on this. The presidential candidate, known for being a businessman, said that he is in opposition to the agreement between AT&T and Time Warner.
The statement was made during a speech in Pennsylvania on Saturday. He stressed that the deal would not obtain approval in a Trump Administration. Well, maybe Trump didn’t give much thought about how this statements could impact the presidential race.
AT&T is expected to continue buying more media companies. This has created concern in other companies such as Verizon, which paid $4.8 billion to Yahoo in order to acquire part of the latter’s business including Yahoo Sports and Yahoo Finances.
Source: Business Insider