US telecoms giant AT&T (NYSE:T) said on Saturday that it plans to buy entertainment group Time Warner Inc (NYSE:TWX) for $85.4 billion.
If approved by regulators, the deal will give AT&T control of CNN, HBO, which produces programming such as Game of Thrones, as well as the Warner Bros studio, where it has the rights to Harry Potter and DC Entertainment superheroes such as Batman, Superman and Wonder Woman.
Chairman and CEO of AT&T, Randall Stephenson, said “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,”
Stephenson expressed confidence that regulators would approve the acquisition, saying that there was no overlap between the two businesses. “This is not a horizontal deal. This is vertical merger. You would be hardpressed to find examples where vertical mergers have been blocked.”
With concern over cable company Comcast Corp’s (NASDAQ:CMCSA) $30 billion acquisition of NBCUniversal, US lawmakers have argued for close regulation over the AT&T deal.
“Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny,” said U.S. Senator Richard Blumenthal. “I will be looking closely at what this merger means for consumers and their pocketbooks.”
Other critics, such as U.S. Republican presidential nominee Donald Trump, believe that “It’s too much concentration of power in the hands of too few,” and plans to block any AT&T-Time Warner deal if he wins the Nov. 8 election.
AT&T has said in the company statement that it plans to pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall.
Time Warner shares had gained about 23 percent this year through Wednesday, boosted by sales gains at HBO premium channel and Turner cable-TV unit. AT&T is up 12 percent in 2016, valuing at about $238 billion.
T&T said it expected to close the deal by the end of 2017.