AT&T has reached a formal agreement to buy Time Warner, according to the Wall Street Journal.
The deal is expected to be announced later on Saturday in the US. AT&T is reportedly paying between $105 and $110 a share in cash and stock for Time Warner, at a valuation of more than $80 billion.
AT&T owns phone lines, broadband internet, and cellular networks, and after last year’s purchase of DirecTV, satellite connections, too. But, as Recode put it, the company doesn’t want to be just another “dumb pipe.” It wants a cut of the action going across those pipes and Time Warner, which owns CNN, HBO, and Warner Bros., among other big media properties, could be AT&T’s way into that business.
Giant media mergers don’t have a great track record, and the last time Time Warner was acquired, by AOL, things ended pretty catastrophically. Both Time Warner and AT&T have a long history of breaking into smaller pieces and merging or acquiring other companies.
The US government may also object to this latest combination between AT&T and Time Warner, which is similar to the merger of Comcast and NBCUniversal. Regulators have since re-examined that deal for violating the terms under which it was approved.