AT&T completes its acquisition of Time Warner

AT&T has sealed the deal to buy Time Warner in a major piece of media and technology consolidation.

The deal — which is $85.4 billion and a total of $108 billion with debt — was first announced in October 2016 and, having passed a court approval earlier this week, it was completed on Thursday.

That’s a long cycle to complete a transaction, but this is a complicated one that sees AT&T take control of Time Warner, as well as HBO, Warner Brother’s film studio and its Turner channels. That’s likely to create a complicated web of conflicts, as both media distribution and content creation come together under the same parent.

“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,” Randall Stephenson, chairman and CEO of AT&T, said in a statement. “We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”

The deal is vital for AT&T. The firm said it expects to save $2.5 billion in “synergies” and return to significant revenue growth within four years. For a snapshot, AT&T’s new look business — which will include Time Warner and Turner — generated some $31 billion last year alone.

This week’s court decision followed a government antitrust suit to block the deal on the grounds that the vertical merger — a term for when companies that provide different or complementary offerings join forces — could harm consumers, particularly on price. The deal was dubbed the antitrust case of the decade, and it was the first time a court has adjudicated over a vertical merger since cell phones were invented, and thus changed the media and distribution landscape.

Now done, AT&T-Time Warner has opened the gate for other mega media deals. This week, Comcast launched a $65 billion bid for Fox, setting up a battle with Disney which bid $52.4 billion in December.

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