The US "Wall Street Journal" reported that AT&T announced on Saturday that it will acquire Time Warner for $85.4 billion. The deal will integrate AT&T's telecom and pay-TV business with Time Warner's entertainment media empire, which is the re-acquisition of large media companies by Concord after the acquisition of NBC Universal in 2011.
The deal is still subject to regulatory approval, but it is unclear whether the deal will be approved. The possibility of another media giant has become the topic of this year's US election. Republican presidential candidate Trump announced that if he is elected president of the United States, it will veto the deal, because it will lead to "too much power concentrated in the hands of a few people."
Al Franken, a Senator of the Democratic Party of Minnesota, said the deal "brought immediate questions about the integration of the media market." He will ask for more information disclosure to determine what impact the deal will have on consumers.
AT&T CEO Randall Stephenson will be the CEO of the combined company. He said the deal will help AT&T provide unique services, especially mobile services. However, he did not announce more details. Time Warner CEO Jeff Bewkes will remain with the company during the transition period after the transaction is completed. He said that more funds will help make more shows and movies.
Both parties emphasized that through the merger, the “innovation†of the two companies will become easier, and there is no need to negotiate the use of the content. The combined company may be able to further study how to target users based on interests and personal data.
Jonathan Chaplin, an analyst at New Street Research, said the acquisition of Time Warner could be AT&T's "good defensive move" for Comcast. Comcast is currently actively exploring new business. Comcast acquired DreamWorks Animation in August this year.
Even if the transaction can be reviewed by US regulators, it is still possible that the regulator will impose many restrictions on the merged company, leaving the deal meaningless.
Craig Moffett, an analyst at Moffett Nathanson, said: "It's hard to imagine what you can do on paper. Maybe only DirecTV users can watch HBO, or AT&T wireless service users can watch TNT or TBS. However, such behavior may be prohibited by the Federal Communications Commission (FCC) and antitrust laws."
AT&T will acquire Time Warner for $85 billion, which is nearly 40% higher than the company's value a week ago. Murphyt said: "I doubt whether the deal can really create value."
Macquarie Capital analyst Amy Yong pointed out that many well-known media industry M&A transactions have failed in the past, the most famous of which is AOL's acquisition of Time Warner in 2001. She said, "Reviewing the past, whether such a large-scale transaction is reasonable has not been proven." She pointed out that AT&T paid "very high prices."
Amy Young also said that AT&T and other operators saw various threats to their business and decided to take action. “Ultimately, these companies will try to compete with Google, Facebook and Amazon, not just for traditional rivals. You can see that Google is entering the mobile communications industry.â€
John Bergmayer of Public Interest, a public interest group, is generally opposed to media industry mergers and acquisitions. He said that AT&T may allow its users to watch Time Warner's movies and TV shows free of charge, which will impact other companies' video business.
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