AT&T and Time Warner announced today, as expected, that they are merging. AT&T is buying all of Time Warner, which includes HBO, CNN, Warner Bros. Entertainment and even DC Comics. Yes, AT&T is also buying Batman, as crazy as that sounds. All of this for $80 billion seems like a pretty decent price. This deal was a bit of a surprise when it first surfaced earlier in the week. Considering AT&T had just finished purchasing DIRECTV last year for $48.5 billion. And now they are forking out another $80 billion to pick up Time Warner.
Of course, this deal does also reflect the change of pace with ISP's in recent years. Where they are looking to diversify their portfolio by picking up large media companies. In 2011, Comcast purchased NBC Universal. And in 2015, Verizon bought AOL which included a number of news websites like Engadget, TechCrunch and many others. This deal between AT&T and Time Warner isn't quite official just yet, but The Wall Street Journal is expecting the deal to be announced this evening, after the board members meet and approve of the merger.
This deal is a big deal for AT&T. Not only because of the amount of money they are putting into this deal, but it also gives them the rights to a few of the larger TV networks like HBO and CNN. Since AT&T is looking to create their own over-the-top (OTT) video service to compete with Verizon's Go90, this gives them a pretty huge leg up on the competition. Especially since HBO is a much larger and more watched network than anything Verizon picked up in buying AOL last year, or in their purchase of Yahoo this year.
There is a chance that this merger could be blocked. As is the case with all mergers and acquisitions, it needs to be approved by the government. And there is a chance that they could block the merger between AT&T and Time Warner. There was a possibility of them blocking them buying DIRECTV last year, but the FCC and Department of Justice approved it, with a few conditions for AT&T put in place.