AT&T is acquiring Time Warner for $85.4 billion

AT&T has announced that it is acquiring Time Warner for $85 billion in a mix of stock and cash adding another giant to the converged media horizon.

The transaction will close by the end of 2017 and has been approved unanimously by the board of directors of each company. AT&T chief executive Randall Stephenson will be the new head of the combined company, while Time Warner leader Jeff Bewkes will be leaving after an interim period, according to the Wall Street Journal.

The final acquisition price will be $107.50 per share, paid in half cash and half AT&T stock. This means that for each outstanding share of Time Warner stock investors will receive $53.75 in cash and $53.75 in AT&T stock.

AT&T says it expects $1 billion in annual run rate cost synergies for the three years following closure of the deal. Also, this acquisition gives the carrier another content property to its prestigious list that includes HBO, Warner Bros., TNT, TBS, CNN, and Cartoon Network, as well as broadcast rights to the National Basketball Association, March Madness, Major League Baseball, and even digital properties like Hulu, Bleacher Report, CNN.com, and Fandango.

By acquiring Time Warner, the company will have access to some of the most popular content produced. By changing the rules of content delivery, AT&T may be able to increase the reach of content, while also making its own services all the more popular.

“This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry work for customers, content creators, distributors, and advertisers. Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen. A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that,” said Randall Stephenson, AT&T chairman, and CEO in an official statement.