AT&T To Buy Cartoon Network, CNN And The Rest Of Time Warner For $108bn
AT&T, global telecommunications giant, on Saturday secured a deal to buy HBO, CNN, and the rest of Time Warner for about $85.4 billion in cash, and a total of $108.7bn in cash and equity.
In context, $108bn is over $20bn more than Bill Gates’ wealth, and 25 percent of the Nigerian economy, according to IMF’s latest estimates.
AT&T and Time Warner said both of their boards unanimously approved the deal, which would be one of the biggest in the history of the media.
“When Jeff (Bewkes, Time Warner’s chief executive) and I started talking, it became clear to us very quickly that we shared a very similar vision,” Randall Stephenson, AT&T’s chief executive, told reporters on Saturday.
“Time Warner, we believe, is the clear leader in premium content.
“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.”
Bewkes, Time Warner CEO, said: “This is a great day for Time Warner and its shareholders. Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalize on the tremendous opportunities created by the growing demand for video content.
“This is a natural fit between two companies with great legacies of innovation that have shaped the modern media and communications landscape, and my senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences.”
The transaction, which is worth $108.7bn, will see AT&T acquire HBO, premium pay television and streaming services; Warner Bros. Entertainment, which consists of television, feature film, home video and videogame production and distribution.
Warner Bros. film franchises include Harry Potter and DC Comics, and its produced TV series include Big Bang Theory and Gotham.
It will also acquire Turner, which consists of US and international basic cable networks, including TNT, TBS, CNN and Cartoon Network/Adult Swim.
Time Warner shareholders will receive $107.50 per share under the terms of the merger, comprising $53.75 per share in cash and $53.75 per share in AT&T stock.
The stock portion will be subject to a collar such that Time Warner shareholders will receive 1.437 AT&T shares if AT&T’s average stock price is below $37.411 at closing and 1.3 AT&T shares if AT&T’s average stock price is above $41.349 at closing.
The telco will serve the entire US population and a lot of countries around the world.