So it’s been news that’s floating around in mainstream media for the past month and it seems AT&T has somewhat closed the deal to acquire Time Warner (TWX), an agreement that would create the world’s largest media company, according to a report from Reuters, thus become closer to a Telco Media Superhouse – given its current profile by way of assets. Recall, the stakes are high now, and as Telcos look to the media industry as a way to become more valuable to their customers, we will see an array of these kinds of deals shaking up the Media space.
Just two years after paying $48.5 billion to acquire DirecTV, AT&T was prepared to pay $110 per share, or $86 billion for Time Warner, a sprawling media conglomerate that includes Warner Bros. movie studio in Los Angeles, the Turner networks in Atlanta and a headquarters in New York. The deal would be structured in both cash and stock, valued at a 23% premium to its Friday closing price.
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The deal reflects AT&T CEO Randall Stevenson’s desire to own content that can be featured on the company’s wireless network as well as through DirecTV, which plans to launch an online multi-channel streaming service later this year. AT&T’s aggressive move to buy Time Warner follows Comcast’s (CMCSA) acquisition in recent years of NBCUniversal as well as Verizon’s (VZ) foray into content through the purchase of Yahoo this year and Aol in 2015.
Like Rupert Murdoch who tried and failed to acquire Time Warner two years ago, Stevenson is said to covet HBO, the premium pay-TV service that launched its own standalone streaming platform last year with great success. AT&T will also have loads of content to deploy from the Cartoon Network, TBS, TNT and CNN, which has broken its own record this year for ratings and revenue.