New York (AFP) – The telecom giant AT&T on Saturday announced to redeem for a 85,4 billion Time Warner, which owns tv channels CNN and HBO and movie studios Warner Bros, a marriage that will change the landscape of the american media.
The transaction amounts to a total 108,7 billion, if you include the debt, wished to make clear AT&T in a press release. A little earlier, a source bank had indicated to the AFP that the operator had agreed to pay more than $ 80 billion for Time Warner, which houses the cult series Game of Thrones.
This marriage creates a juggernaut in both the content and the pipes, with large market shares in these two sectors at the margins very lucrative, particularly content that attract Amazon, Netflix, and now Google.
The agreement is “a perfect assortment of two companies with complementary strengths that can bring a new vision of how the industry of media and telecommunications is working for customers, content creators, distributors and advertisers,” said the president of AT&T, Randall Stephenson, in a statement.
The wedding, which should be finalized by the end of 2017, will be in cash and in shares. The shareholders of Time Warner, who will receive 107,50 $ title, hold, and between 14.4 per cent and 15.7 per cent of the new entity and those of AT&T the balance of the capital.
This merger should be closely reviewed by the competition authorities and the us political class because the new entity would be alone for more than $ 300 billion in the stock Exchange, with activities ranging from the telephone to the media through the cable and the internet.
In the countryside on Saturday, Donald Trump, the republican candidate for the White House, has already said that he would do everything to block the marriage if he was elected president on 8 November next.
“It’s a lot of concentration of power in the hands of a few people”, criticized Mr. Trump.
- from The Sopranos to Sex in the city -
AT&T, a provider of access to pay tv channels and one of the two major telecom operators u.s., was valued 230,6 billion dollars Friday night on Wall Street, while Time Warner, which owns 10% of the share capital of the service of video streaming Hulu, was worth $ 69.6 billion. AT&T claimed to have 142 million subscribers to wi-fi at the end of June and 30 million in north America and $ 38 million to the video via DirectTV.
The merger, AT&T-Time Warner is one of the biggest marriages between a provider of access to pay tv channels and a provider of content since the acquisition in 2011 of NBCUniversal by Comcast.
It complements the strategic focus to the video boosted in recent years by AT&T.
one of the most “transformative” for the telecoms operator was the purchase of nearly $ 50 billion (without debt) of DirecTV, curly last summer, that has made the group one of the largest players on the american market of the television broadcast fee.
With Time Warner, the owner of the studios Warner Bros and tv channels HBO and CNN, AT&T will put this time the hand on a large catalogue of content sought in the sport, the film (“Suicide Squad” or “Fantastic Beasts”…) and television series such as “Game of Thrones”, “The Wire” or even “Sex in the City” and “The Sopranos”.
two years ago, Time Warner had rejected an offer to more than $ 75 billion from 21st Century Fox, its rival controlled by the Murdoch family, as the price proposed was considered to be inadequate. It is therefore a good personal revenge for Jeff Bewkes, who had been criticized for refusing the offer of Fox.
Time Warner has already in the past made an attempt of marriage an unhappy one. With the group american internet AOL in 2000, it had ended in a divorce in 2009.
The group, however, represents a piece of choice, because of the contents of value of which he is owner, but also of the quite simple structure of its ownership structure, with a single class of shares, according to the analysts of RBC Capital Markets.
a Lot of other big media groups in the u.s. are indeed protected by a controlling shareholder, locking a large part of the voting rights, as the Murdoch family with 21st Century Fox or the Redstone with Viacom, and CBS.
“It leaves basically that Disney, which would be impossible with a market capitalization of nearly $ 150 billion”, adds RBC.