AT&T’s proposed acquisition of Time Warner is premised on speed – a need to keep up with consumer expectations and media industry changes.
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AT&T T, -1.95% and Time Warner TWX, -2.49% delivered on investors’ expectations, announcing a $85.4 billion cash-and-stock merger deal over the weekend, but shares of Time Warner slumped more than 2% in midday trade Monday. AT&T fell 1.8 percent to $36.80.
He added: “With AT&T, we’re bringing together all our great television, film, games and digital content and we’re aligning it with their direct-to-consumer distribution across TV – including DirecTV – mobile and broadband in the United States and across Latin America”.
He said he is convinced that a “large segment of our customers” will continue to pay for a “premium bundle”, the kind most American households now have, but “there is another segment of our customer base that wants mobility-centric content”. “This is not a proposal that can be fixed with tweaks, divestitures or conduct agreements”.
“The big question is how a new presidential administration will try to make a mark with its handling of the deal, but I expect whoever is elected will essentially wave [in approval] as it goes by”, said Bill Menezes, an analyst at Gartner.
However, the deal is under intense scrutiny over concerns that the merged companies could implement “zero-ratings” programs, through which wireless companies treat some content data differently than others.
The AOL deal was the right idea and if the Time Warner had made it work, then it might be in a much better place, Swisher noted.
Ma Bell might be paying too much.
In fact, in many ways it’s hard to say what the proposed mega-merger might mean for consumers – because it isn’t for consumers. “Time Warner has a lot of content properties and content certainly hasn’t helped Sony or Verizon, so I wonder if the execs at AT&T are trying to cover up [that] they don’t really know how to grow the company anymore”, said Enderle. Credit Agricole SA cut Time Warner from an “outperform” rating to an “underperform” rating in a research note on Monday.
The Justice Department is expected to be involved in deciding whether to approve the merger, but it’s not clear whether the FCC also has jurisdiction.
This year alone, the DOJ filed antitrust lawsuits in an effort to block two large health insurance mergers: Anthem’s $48 billion acquisition of Cigna and Aetna’s $37 billion takeover of Humana. But in this case, you get more upside reward to offset the lower chances of the deal happening.
If the deal is approved, AT&T will also take on a lot of debt.
In a profoundly rare occurrence this year, Republican party nominee Donald Trump agreed with the rival Clinton camp, issuing an even stronger condemnation of the deal while on a campaign stop.
Trump has been a highly vocal critic of the USA mainstream media, which he believes is universally aligned against his candidature in the upcoming election.
In a press release on Sunday the company said the merger would “create new customer choices – from content creation and distribution to a mobile-first experience that’s personal and social”.
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Former Democratic presidential candidate Sen.
