AT&T Inc Acquisition Of Time Warner Inc Confirmed

AT&T Inc, the telecommunication giant has confirmed the buying of Time Warner Inc for a humongous amount of $85.4 Billion. The acquisition is said to the largest by any telecommunication company in respect of live streaming content.

After Comcast’s takeover of NBCUniversal for $30 Billion and one of the most talked about takeover by Verizon Communications of both Huffington Post and Yahoo, AT&T has now claimed the gold mine as Time Warner Inc acquisition will allow the company to stream contents from HBO, CNN, Warner Bros and many others.

The acquisition is priced at $107.5 per share and the payment will be made through both cash and AT&T shares. Half of the payment will be made through cash and the other half through shares, i.e. the shareholders of Time Warner Inc will receive $53.75 in cash and $53.75 in form of AT&T stocks. After this once in a lifetime acquisition, Time Warner Inc will amount to 15% of the total revenue in the combined company.

AT&T has acquired two other companies in the past, namely DirecTV and Charter Communications to secure its position in the Content Streaming business.

This has resulted in a makeover for AT&T, as it has around 38 million video subscribers through the recently acquired DirecTV and after the Time Warner acquisition, the number of subscribers may increase substantially, which can further make AT&T a ‘market leader’.

The deal has also highlighted the need for telecommunication carriers to adapt according to the market changes to attract a regular inflow of new customers, as there are many players in the market who can hamper this flow by launching more economical services.

However, market analysts have said that this takeover may result in a manipulation of content by the parent company, as AT&T will also acquire CNN, which is one of the most coveted news channel of US and accumulating so much power in limited hands can result in a disaster.

The merger has created such a hype that even the Presidential Candidate Donald Trump said that, if he is elected as the next US President then he will for sure block the deal as it is ‘against Democracy’.

Hillary Clinton also commented on the issue and said that an acquisition of this scale should be evaluated and scrutinized properly.

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24 October 2016
Rohan Jaitly