AT&T to acquire Time Warner for $85.4 billion, deal expect to close by year-end 2017
by October 23, 2016 8:59 am 151 views
AT&T Inc. announced a blockbuster deal on Saturday (Oct. 22) that it plans to acquire Time Warner in a stock-and-cash transaction valued at $107.50 per share.
The agreement has been approved unanimously by the boards of directors of both companies, the companies said, with a purchase price implying a total equity value of $85.4 billion and a total transaction value of $108.7 billion, including Time Warner’s net debt. 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.
The Dallas-based telecom giant expects the deal to be accretive in the first year after close on both an adjusted EPS and free cash flow per share basis.
AT&T expects $1 billion in annual run rate cost synergies within 3 years of the deal closing. The expected cost synergies are primarily driven by corporate and procurement expenditures. In addition, over time, AT&T expects to achieve incremental revenue opportunities that neither company could obtain on a standalone basis.
The merger is subject to approval by Time Warner Inc. shareholders and review by the U.S. Department of Justice.
AT&T and Time Warner are currently determining which FCC licenses, if any, will be transferred to AT&T in connection with the transaction. To the extent that one or more licenses are to be transferred, those transfers are subject to FCC review.
The transaction is expected to close before year-end 2017.