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AT&T To Buy Time Warner In An $85.4 Billion Blockbuster Media Deal

Phil Harvey

AT&T has entered into an agreement to buy Time Warner Inc. for $85.4 billion in a stock-and-cash transaction that values Time Warner at $107.50 a share.

AT&T has been scrambling to add more value to its basic connectivity services, especially given that companies like Apple, Netflix, Facebook and Google are all, to some degree, using its connections to deliver services to consumers and businesses. If this deal closes without a hitch, Time Warner will represent about 15 percent of the combined company's revenues.

Time Warner, a global entertainment and media powerhouse, would bring several media properties to AT&T’s portfolio in the deal, including CNN, HBO, HBO Now and HBO Go, a lucrative package of domestic premium pay television and streaming services.

Time Warner shareholders will receive $107.50 per share under the terms of the merger, comprised of $53.75 per share in cash and $53.75 per share in AT&T stock, according to a statement by AT&T on Saturday.

Following the deal, Time Warner shareholders will own between 14.4% and 15.7% of AT&T shares on a fully-diluted basis based on the number of AT&T shares outstanding today, the companies said.

The merger is subject to regulatory approvals by the Justice Department and approval by Time Warner Inc. shareholders.

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