Step Aside Apple, AT&T Wants To Enter Hollywood With Time Warner Acquisition

I thought Microsoft had a lot of extra money lying around when it acquisited Linkedin earlier this year. But apparently AT&T is all out to prove that it means business when it buys Time Warner for $85.4 Billion dollars. Sum up the wealth of Bill Gates and Donald Trump, you have the required amount needed to buy that company.

I have always considered that it would be really untoward for a company to be bought if it was doing well on the market. Being independent could really help you in a number of ways and number one is retaining your own brand.

Time Warner is currently the 2nd Largest company in the entertainment industry, second to Disney at the time of writing. It owns the likes of CNN, HBO, Warner Bros Entertainment, WB Games, Bleacher Report, Square Enix Europe (subsidiary), TS, TBS and so on. For a whole list you can go here.

So basically Time Warner is a huge company and for AT&T this will be huge merger. Going by the figures, AT&T has agreed to pay $107.5 per share in a half-cash, half-stock deal. There will also be a change of management at Time Warner with AT&T Chief Executive Randall Stephenson replacing Time Warner Chief Executive Jeff Bewkes. The latter will stay on for an interim term till the deal is closed, by the end 2017.

It should be noted that Jeff was under fire in 2014 when 21st Century Fox made a bid to acquisit the media company for $85 per share and he refused. Right now, we are pairing premium content with a wireless networks and phone services supplier. The market capitalization of Time Warner currently stands at a massive $72 Billion. In comparison, Disney's market capitalization stands at $150.2 Billion according to Wikinvest or an approximate $149.67 Billion according to the most recent statistics. 21st Century Fox stands at $48.83 Billion which is far below compared to both these companies.

While the deal isn't final as Time Warner stats that it will pay $1.7 Billion breakup fee if some other company comes up with a better bid (looks at Apple), But I reckon there is a minimal chance of backing out at this stage.

Apple has shown interest in Time Warner's products in the past and was in negotiations with them according to reputed media publishers. It was also reported that they would most likely acquisit them before AT&T ever got into the game but apparently they are a lot late.
Here is a quote from AT&T's press release:

“Time Warner’s leadership, creative talent and content are second to none. Combine that with 100 million plus customers who subscribe to our TV, mobile and broadband services – and you have something really special,” said Stephenson. “It’s a great fit, and it creates immediate and long-term value for our shareholders.”

The move to a mobile first world grows ever stronger, there is no denying that it is the turning point for all industries out there. What are your thoughts on this deal? Will this deal positively or negativity impact AT&T?