AT&T Inc. has agreed to buy Time Warner Inc. for $85.4 billion, forming a telecommunications and media empire, Bloomberg reports.
AT&T will now become an empire that will own many of the movies and TV shows it pumps through to subscribers of its wireless, internet and pay-TV services.
The cash-and-stock deal values Time Warner at about $107.50 a share, the companies said Saturday in a statement, 20 percent 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.
“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,” AT&T Chairman and Chief Executive Officer Randall Stephenson said in the statement.
The deal caps Stephenson’s vision to expand AT&T into media and entertainment as its wireless business matures. Gaining premium cable channel HBO, CNN and the Warner Bros. studio means AT&T becomes a content owner rather than just a distributor of video.
“When we first discussed this we thought it might be unique enough and worthy of investigating whether we could put the two companies together and create something different,” Stephenson said on a conference call Saturday night to discuss the deal. The negotiation process went fast, he said, adding that it had “a gravity to it.”