Seismic Media Shift: ATT To Acquire Time Warner

(Reuters) -- AT&T Inc (T.N) said on Saturday it agreed to buy Time Warner Inc (TWX.N) for $85.4 billion, the boldest move yet by a telecommunications company to acquire content to stream over its network to attract a growing number of online viewers.

The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The tie-up will likely face intense scrutiny by U.S. antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.

AT&T will pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.



Dallas-based AT&T said the U.S. Department of Justice would review the deal and that the companies were determining which Federal Communications Commission licenses, if any, would be transferred to AT&T in the deal.

U.S. lawmakers were already worried about cable company Comcast Corp's (CMCSA.O) $30 billion acquisition of NBCUniversal, and several argued for close regulatory scrutiny of the AT&T deal.

"Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny," said U.S. Senator Richard Blumenthal, Senate Judiciary Committee member and former attorney general of Connecticut. "I will be looking closely at what this merger means for consumers and their pocketbooks."

U.S. Republican presidential nominee Donald Trump said at a rally he would block any AT&T-Time Warner deal if he wins the Nov. 8 election. Trump has complained about media coverage of his campaign, especially by Time Warner's CNN.

"It's too much concentration of power in the hands of too few," said Trump.

Democratic presidential nominee Hillary Clinton thinks U.S. regulators should closely scrutinize AT&T's acquisition of Time Warner, her spokesman said on Sunday.

Clinton spokesman Brian Fallon told reporters on Sunday there were "a number of questions and concerns" about the deal "but there's still a lot of information that needs to come out before any conclusions should be reached."

"But certainly she thinks regulators should scrutinize it closely," Fallon said.

Perella Weinberg Partners LP, Bank of America Corp and JPMorgan Chase & Co were financial advisers to AT&T, with Bank of America and JPMorgan also offering bridge financing, while Sullivan & Cromwell LLP and Arnold & Porter LLP provided legal advice.

Allen & Co LLC, Citigroup Inc and Morgan Stanley acted as financial advisers to Time Warner, while Cravath, Swaine & Moore LLP was its legal adviser.