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US network AT&T has agreed to acquire Time Warner in a deal worth around US$85.4-billion.
The acquisition, which will take the form of stock and cash, values Time Warner shares at US$107.50 per share. So what are the two companies hoping for as a result?
“The deal combines Time Warner’s vast library of content and ability to create new premium content that connects with audiences around the world, with AT&T’s extensive customer relationships, world’s largest pay TV subscriber base and leading scale in TV, mobile and broadband distribution,” AT&T wrote in a statement.
The acquisition would mean that the US network owns CNN, HBO and even a minority stake in Hulu.
The AT&T, Time Warner deal already has its critics
AT&T chairperson and CEO Randall Stephenson said the deal represented “a perfect match” of two firms.
“Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen,” the CEO elaborated.
“A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that. We intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications.”
The transaction is expected to close before the end of 2017, but there’s already opposition to it.
Democrat senator Bernie Sanders has called for the deal to be killed, arguing that it would mean “higher prices and fewer choices” for citizens.
The administration should kill the Time Warner/AT&T merger. This deal would mean higher prices and fewer choices for the American people. https://t.co/S8c4ldDqhi
— Bernie Sanders (@SenSanders) October 23, 2016
Republican presidential hopeful Donald Trump has also lashed out at the deal, saying he would break it up if elected.
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump was quoted as saying by Broadcasting & Cable.
The Clinton camp has also raised their eyebrows at the deal, with Hillary Clinton’s spokesperson telling MarketWatch that it raises “a number of questions and concerns”.
The network has however sought to allay fears over Time Warner’s independence, specifically singling out CNN.
“Our intent is to operate Time Warner as it operates today, with autonomy in its divisions, including the world-class creative talent and journalists that make Time Warner a leader in entertainment and news,” Stephenson said in a follow-up statement.
“CNN is an American symbol of independent journalism and First Amendment free speech. My board and I are clear — CNN will remain completely independent from an editorial perspective.”
If unsuccessful, it wouldn’t be the first time that AT&T was denied a deal. Back in 2011, the company made an ill-fated bid for fellow carrier T-Mobile, sparking widespread opposition.