New | In world’s biggest deal: AT&T to buy Time Warner in US
HBO, CNN and Warner Bros to come under one umbrella for US$85 billion price tag
AT&T has reached an agreement in principle to buy Time Warner for about $85 billion, sources said on Friday, paving the way for the biggest deal in the world this year that would give the telecom company control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.
The deal, which has been agreed on most terms and could be announced as early as Sunday, would be one of the largest in recent years in the sector as telecommunications companies look to combine content and distribution to capture customers replacing traditional pay-TV packages with more streamlined offerings and online delivery.
AT&T, which sells wireless phone and broadband services, has already made moves to turn itself into a media powerhouse, buying satellite TV provider DirecTV last year for $48.5 billion.
It also in 2014 entered a joint venture, Otter Media, with the Chernin Group to invest in media businesses, and has rolled out video streaming services.
AT&T will pay $110 per Time Warner share, or about $85 billion overall, sources told Reuters. Time Warner’s shares rose almost 8 per cent in regular trading, and a further 4.5 per cent after hours, to $93.25, giving it a market value of about $73 billion.