AT&T to buy Time Warner for $85.4 billion

Wire dispatches

AT&T is buying Time Warner, the owner of the Warner Bros. movie studio as well as HBO and CNN, for $85.4 billion in a deal that could shake up the media landscape.

The acquisition would combine a telecom giant that owns a leading cellphone business, DirecTV and internet service with the company behind some of the world’s most popular entertainment, including “Game of Thrones,” ‘’The Big Bang Theory” and professional basketball.

It would be the latest in a scramble of tie-ups between the owners of digital distribution networks – think cable and phone companies – and entertainment and news providers, all aimed at shoring up businesses upended by the internet.

The deal would make Time Warner the target of the two largest media-company acquisitions on record, according to Dealogic. The highest was AOL’s disastrous $94 billion acquisition of Time Warner at the end of the dot-com boom.

Regulators would have to sign off on the deal, no certain thing. The prospect of another media giant on the horizon has already drawn fire on the campaign trail. Speaking in Gettysburg, Pa., Donald Trump vowed to kill it if elected because it concentrates too much “power in the hands of too few.”

Shares of AT&T, as is typical of acquirers in large deals, fell on reports of a deal in the works on Friday, ending the day down 3 percent.

Some analysts expressed skepticism that AT&T could pull off such a huge transaction just 15 months after the Dallas phone company swallowed satellite television service DirecTV – or even if a such a combination made much sense.

“It’s eat or be eaten,” said Amy Yong, a media analyst with Macquarie Capital. “Traditional competitors are no longer the real threat. You are really going up against huge Silicon Valley tech companies that have deep pockets and are willing to invest.”

The media merger wave is in full swing, and comes as traditional phone companies sweep up entertainment assets in a fight to secure their future. Earlier this year, competing mobile phone carrier Verizon Communications agreed to pay $4.8 billion for Yahoo’s core assets.

AT&T Chief Executive Randall Stephenson, 56, a former accountant from Oklahoma, has been particularly aggressive about molding the old Ma Bell for the digital age.

The company, now valued at $230.6 billion, has poured billions of dollars into upgrading its network infrastructure as more customers use their mobile phones to consume videos and music.