In what could go down as the deal of the century, AT&T plans to spend an industry-shaking $85 billion on media giant Time Warner.
The takeover would turn AT&T Inc. (NYSE: T) into a vertically integrated player straddling the telecom and media markets. At a stroke, it would become the owner of some of the most popular video content on the planet, including shows like Westworld, Veep and Game of Thrones. As the battle over premium content heats up, AT&T will control much of what viewers are watching besides the networks on which it is screened.
Table 1: AT&T & Time Warner at a Glance
|CEO||Randall Stephenson||Jeff Bewkes|
|Headquarters||Dallas||New York City|
|Revenues (2015)||$146.8 billion||$28.1 billion|
|Operating income (2015)||$24.8 billion||$6.0 billion|
|Net profit (2015)||$13.7 billion||$3.8 billion|
|Capital expenditure (2015)||$19.2 billion||$423 million|
|Current market cap||$226.7 billion||$68.1 billion|
|Source: AT&T, Time Warner.|
But the deal faces a number of obstacles. AT&T CEO Randall Stephenson is doing his PR bit, insisting the lack of overlap between AT&T and Time Warner Inc. (NYSE: TWX) should see any regulatory opposition melt away. Others have a different take, with Republican presidential candidate Donald Trump reportedly describing the tie-up as an "example of the power structure I'm fighting." Democrats have also voiced objections to the deal. And the share prices of both companies fell on Monday amid Wall Street skepticism.
In the meantime, rivals from Verizon Communications Inc. (NYSE: VZ) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) to Netflix Inc. (Nasdaq: NFLX) and Google (Nasdaq: GOOG) will be pondering the implications of a merger for their own communications, entertainment and advertising businesses.
Light Reading has been tracking developments from the outset and will continue to provide insight and opinion on what this move would mean for AT&T, Time Warner and everyone else. Check out our coverage below:
- AT&T's $85B Time Warner Takeover Is a Media Game Changer
- AT&T/TW: DirecTV Now Only the Beginning
- Trump: Dump AT&T/TW & Comcast/NBC
- That Was Quick: AT&T to Buy Time Warner for $85B
- AT&T & Time Warner in Merger Talks – Report
- T-Mobile: AT&T & TW Means Ma Bell Not Focused on Mobile
- AT&T/TW Tie-Up Is Bad News for Vendors – Analyst
- GTT Applauds AT&T's New Distraction
- AT&T CEO: We'll Move Faster to 5G Because of Time Warner Deal
- Merger Musings: TW + AT&T = ? (from Telco Transformation)
- Making AT&W greater than the sum of its parts won't be easy (from Telecoms.com)
- AT&T drops $109 billion on Game of Thrones (also from Telecoms.com)
— Iain Morris, , News Editor, Light Reading