AT&T takeover of Time Warner will create a fierce competitor for Chinese firms
The US$85.4 billion deal would create a new media juggernaut, but first it must pass the scrutiny of US regulators
AT&T’s US$85.4 billion takeover of entertainment giant Time Warner faces a potentially rocky path to getting approval from Washington, according to analysts.
The deal, which would turn AT&T into a media giant, is certain to come under unprecedented scrutiny by regulators, no matter what the outcome of the November 8 presidential election. Both the Democratic and Republican presidential nominees have expressed their reservations about blockbuster mergers, with Donald Trump specifically condemning the AT&T deal as placing “too much concentration of power in the hands of too few.”
But it’s not just American media companies who have something to fear from such a sizable consolidation in the sector.
Such a mega deal can translate into intensifying competition for Chinese conglomerates like Wanda
The mega merger, if it does get the green light from regulators, would create a formidable competitor for Chinese companies like Dalian Wanda Group, according to analysts. Dalian Wanda, owned by billionaire Wang Jianlin, has been on its own buying spree in recent years, snapping up America’s biggest cinema operator AMC and European theatre giant Odeon.
“Such a mega deal can translate into intensifying competition for Chinese conglomerates like Wanda that have a global ambition in media and film business,” Huang Guofeng, a telecommunications, media and technology (TMT) analyst with Beijing-based consultancy Analysys told the South China Morning Post on Sunday.
“Time Warner operates an array of online and brick-and-mortar media businesses, and the merger between it and AT&T will enhance their penetration all across the board in the US, which then will add some pressure for aspiring new comers like Wanda.”
The cash-and-stock deal values Time Warner at about $107.50 a share, the companies said on Saturday in a statement, 20 per cent more than Friday’s closing price. Time Warner shareholders are to receive $53.75 per share in cash and $53.75 a share in AT&T stock.