CEO: How AT&T's plans to buy Time Warner for $108bn will disrupt media industry - Technology Times

Randall Stephenson, AT&T chairman and CEO says that plans by the US telecoms giant to buy American multinational media and entertainment conglomerate, Time Warner Inc. for $108.7 billion will change the media industry. “This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works 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, Stephenson says in the wake of announcement by AT&T that it has inked a definitive agreement to acquire Time Warner Inc. for a total transaction value of $108.7 billion. The agreement which has been approved unanimously by the boards of directors of both companies will see AT&T acquire Time Warner in a stock-and-cash transaction valued at $107.50 per share, according to the statement released by both companies. The deal combines Time Warner's vast library of content and ability to create new premium content that connects with audiences around the world, with AT&T's extensive customer relationships, world’s largest pay TV subscriber base and leading scale in TV, mobile and broadband distribution. The AT&T chairman and CEO says that, “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. We intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications." Stephenson adds that “With great content, you can build truly differentiated video services, whether it’s traditional TV, OTT or mobile. Our TV, mobile and broadband distribution and direct customer relationships provide unique insights from which we can offer addressable advertising and better tailor content,” Stephenson said. “It’s an integrated approach and we believe it’s the model that wins over time. “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.” [caption id="attachment_50937" align="aligncenter" width="8000"] People seen testing mobile phones at a launch event in Lagos, one of the biggest phone markets in Nigeria[/caption] Jeff Bewkes, Time Warner Chairman and CEO says, “This is a great day for Time Warner and its shareholders. Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalize on the tremendous opportunities created by the growing demand for video content. “That’s been one of our most important strategic priorities and we’re already making great progress both in partnership with our distributors, and on our own by connecting directly with consumers. Joining forces with AT&T will allow us to innovate even more quickly and create more value for consumers along with all our distribution and marketing partners, and allow us to build on a track record of creative and financial excellence that is second to none in our industry. In fact, when we announce our 3Q earnings, we will report revenue and operating income growth at each of our divisions, as well as double-digit earnings growth. Bewkes continues, “This is a natural fit between two companies with great legacies of innovation that have shaped the modern media and communications landscape, and my senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences.” The summary and terms of the transaction as given by both companies means that 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. The stock portion will be subject to a collar such that Time Warner shareholders will receive 1.437 AT&T shares if AT&T’s average stock price is below $37.411 at closing and 1.3 AT&T shares if AT&T’s average stock price is above $41.349 at closing. This purchase price implies a total equity value of $85.4 billion and a total transaction value of $108.7 billion, including Time Warner’s net debt. Post-transaction, 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 cash portion of the purchase price will be financed with new debt and cash on AT&T’s balance sheet. AT&T has an 18-month commitment for an unsecured bridge term facility for $40 billion, according to both companies. Time Warner is a global player in media and entertainment with a great portfolio of content creation and aggregation, plus iconic brands across video programming and TV/film production. Some of the brands associated with Time Warner include international basic cable networks such as TNT, TBS, CNN and Cartoon Network/Adult Swim. There is also the international premium & basic pay television and streaming services; Warner Bros. Entertainment, which consists of television, feature film, home video and videogame production and distribution. Warner Bros. film franchises include Harry Potter & DC Comics, and its produced TV series include Big Bang Theory and Gotham; Turner consists of U.S.

CEO: How AT&T’s plans to buy Time Warner for $108bn will disrupt media industry

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