AT&T, Time Warner in mega-deal worth over $80 bn: banking source

Telecoms heavyweight AT&T has struck a deal to buy entertainment powerhouse Time Warner for $80 billion-plus, a banking source said Saturday, in a merger that would create a new media-telecom giant.

An official announcement is expected before Monday's trading session on Wall Street.

AT&T is the second-largest US wireless carrier and third-largest cable TV provider in the United States, while Time Warner controls a valuable stable of entertainment content suppliers, including Warner Bros. film and TV studios, the HBO television production group, cable news giant CNN, and the TNT and TBS cable channels.

A union of the two media titans -- together worth more than $300 billion in market value -- is certain to face tough scrutiny from antitrust regulators because of potential ripple effects across media platforms.

A deal could price Time Warner at more than $105-110 per share, or more than $80 billion, the source said.

Neither company immediately responded to the report.

Analysts believe the transaction also could prompt other big deals involving large media companies.

The Wall Street Journal reported Friday that Apple had approached Time Warner about a possible deal a few months ago, but the talks failed to make progress. Apple is continuing to monitor the negotiations, the newspaper said.

- Times they are a-streaming -

The deal comes amid challenges facing media companies from the decline of conventional cable television as consumers increasingly turn to streaming on mobile technology.

AT&T had $147 billion in revenues in 2015 while Time Warner reported $28 billion.

AT&T has pursued an aggressive expansion, paying almost $50 billion to buy satellite television provider DirectTV in 2015.

The merger with Time Warner would be one of the biggest marriages between a pay-channel company and a content provider since the Comcast's takeover of NBCUniversal in 2011.

Analysts expect it will face objections from US regulators.

Many other major US media groups are protected by majority shareholders who hold a large portion of the voting rights, such as the Murdoch family with 21st Century Fox and the Redstones with Viacom and CBS.

AT&T's nearly $50 billion purchase -- excluding debt -- of DirecTV last year represented one of the company's biggest evolutionary strides, making it a leading player in the US pay-TV market.

With Time Warner on board, AT&T would now get control of a massive catalog of popular content from sports to films, such as "Suicide Squad" and "Fantastic Beasts," and TV series including "Game of Thrones," "the Wire," "Sex in the City" and "The Sopranos."

Time Warner rejected an offer of more than $75 billion two years ago from 21st Century Fox, controlled by the Murdoch family, saying the price was too low.

Time Warner has had one previous unhappy tie-up, with US internet group AOL in 2000, which ended in a split in 2009.

Time Warner shares soared 7.8 percent Friday following reports of the talks. They were up another 4.9 percent in afterhours trading on fresh reports suggesting the two sides were even closer to a deal.

AT&T dropped 3.0 percent during regular-hours trading Friday, and fell another 0.7 percent in after-hours trade.