The deal, which is said to be the biggest in the world so far this year, is currently awaiting approval from regulators.
If the takeover goes through, it would combine AT&T’s distribution network with content from the Warner Brothers film studios and the cable TV channels HBO and CNN.
The deal is likely to be scrutinised by US antitrust regulators. Randall Stephenson, chairman and chief executive of AT&T, said he did not anticipate any regulatory obstacles, saying any concerns could be overcome if concessions were made.
“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 for customers, content creators, distributors and advertisers,” he said.
Buying Time Warner will allow AT&T to become a full service media provider and one of the most important companies in the world. It also allows a newly-merged entity to steal a march on the likes of Verizon or Comcast in a competitive US market. An AT&T statement said that aim of the deal was to give customers “unmatched choice, quality, value and experiences that will define the future of media and communications” and the new company would “lead the next wave of innovation in converging media and communications industry”.
However, it’s been said that the deal could be deemed anti-competitive by regulators, because AT&T already owns mobile phone, broadband and cable TV networks.
The US telecoms giant will pay $107.50 for each Time Warner share, in a combination of cash and stock, worth $85.4billion overall, according to a statement. AT&T said it expected the deal to be completed by the end of 2017.