NEW YORK (CBS SF) — AT&T Inc. announced will buy Time Warner in a mega deal that will transform the phone company into a media giant.
The company has agreed to buy Time Warner, owner of the Warner Bros. movie studio as well as HBO and CNN, for $85.4 billion.
It is one of the second biggest media-company acquisitions on record and is sure to shake up the media landscape. The highest was AOL’s disastrous $94 billion acquisition of Time Warner at the end of the dot-com boom.
AT&T announced the agreement late Saturday after days of speculation. Under the agreement, it will acquire Time Warner in a stock-and-cash transaction valued at $107.50 per share. The boards of directors of both companies unanimously approved the deal.
“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 Randall Stephenson, AT&T chairman and CEO in a press release. “Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen.”
Time Warner agreed to pay a $1.7 billion “breakup fee” if another company outbids AT&T’s offer.
Federal regulators still have to sign off on the deal, but inside sources say approval is almost certain.
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