AT&T Holding Talks With Time Warner Over Acquisition


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att-signAT&T Inc is closing in on an agreement to acquire Time Warner Inc. The deal would mark a new milestone in the converging telecommunications and media sectors and could push other rivals in the industry to attempt to make deals of their own.

Those close to the situation said a deal could take place during the weekend, and would bring together the broadband, wireless and satellite television brands of AT&T with the entertainment empire of Time Warner that includes network like TBS, CNN, TNT and HBO and Warner Brothers TV and film studios.

Talks toward a purchase of cash as well as stock have sped up quickly and could still fall through or stall said those close to situation. The two companies are discussing a deal, in which Time Warner would be valued from $105 to $110 per share or over $80 billion, said those close to the discussion.

It is also possible that other bidders might emerge including traditional technology companies or media conglomerates. Time Warner was approached by Apple Inc about merging a couple of months ago. While the talks did not remain active, Apple has monitored the situation said one person in the know.

If a sale of Time Warner occurs, it might encourage other media and telecom companies to look for their own deal to merge.

Shares of Time Warner rose by 8% on the news a deal could be reached, while AT&T dropped by 3% on Friday.

A merger of AT&T and Time Warner would be a highly ambitious joining of distribution and content since the 2011 purchase by Comcast of NBCUniversal and create a huge company that would rival that same cable behemoth.

The value of the deal could become the largest media deal of the past few years. Time Warner’s market capitalization is $72 billion while AT&T’s has a $226 billion market cap.

A deal this size would receive intense scrutiny from regulatory officials in the U.S. who have shown misgivings about the deal between Comcast and NBCUniversal, in particular if the merger obligations placed on Comcast were even enforceable. That makes it uncertain if they would bless one more merger of such proportions.

CEO at AT&T Randall Stephenson and CEO at Time Warner Jeff Bewkes started talks of a merger the past few weeks with internal team support.

An acquisition by AT&T of Time Warner would bring back memories of the deal between AOL and Time Warner in 2000.

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