The newly formed company will make AT&T a key player in the North American content space, adding to its existing dominance in video, mobile and broadband services.
“The content and creative talent at Warner Bros, HBO and Turner are first-rate. Combine all that with AT&T’s strengths in direct-to-consumer distribution, and we offer customers a differentiated, high-quality, mobile-first entertainment experience,” said Randall Stephenson, chairman and CEO of AT&T. “We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”
Structurally the new company will operate under four key divisions. AT&T Communications, which provides mobile, broadband, video and other communications services to US, AT&T’s media business which will consist of the newly acquired HBO, Turner and Warner Bros, AT&T International which will provide mobile services in Mexico, plus pay-TV service across 11 countries in South America and the Caribbean and AT&T’s advertising and analytics business which provides marketers with advanced advertising solutions.
A new executive management team has also been put in place with John Donovan, still at the helm as CEO of AT&T Communications. John Stankey as CEO of AT&T’s media business, Lori Lee as CEO of AT&T International and Brian Lesser as CEO of AT&T’s ad and analytics business.
Jeff Bewkes, the former chairman and CEO of Time Warner, will stay on with the company as a senior advisor during a transition period. Bewkes previously stated that he would step down from the position of chairman and CEO upon completion of the merger.
“Jeff is an outstanding leader and one of the most accomplished CEOs around. He and his team have built a global leader in media and entertainment. And I greatly appreciate his continued counsel,” said Stephenson.
The final financial breakdown of the transaction shows that Time Warner shareholders received 1.4 shares of AT&T common stock, in addition to $53.75 in cash, per share of Time Warner. As a result, AT&T issued 1,185 million shares of common stock and paid $42.5 billion in cash.
The deal is set to produce $2.5 billion in increased synergies and AT&T says it will begin consolidating Time Warner results as of 15 June 2018.
The $85 billion deal has been two years in the making and tumultuous to say the least. Back in December the US Justice Department launched legal action in order to block the merger. At the time the department said that the merger would reduce competition and potentially lead to higher consumer prices by concentrating too much control of media properties under one company.
The DoJ claimed in its complaint AT&T would have the "incentive and ability" to charge rivals "hundreds of millions of dollars more" for the right to distribute content from major Time Warner properties including HBO and CNN.
But a few days ago the acquisition was approved by federal judge Richard Leon of United States District Court in Washington. Leon ruled that the DOJ could not prove that the acquisition would lead to fewer choices for consumers and higher prices for television and internet services.
