AT&T Bid for Time Warner

Authors

  • John Marsh

Keywords:

SECRJ, Southeast Case research Association, AT&T, Time Warner, regulatory approval, debt load, 21st Century Fox, case

Abstract

On October 22, 2016 AT&T announced an agreement to buy Time Warner for over $85 billion. The agreement was met with surprise and a fair bit of skepticism. Only two years earlier in 2014, executives at Time Warner advised shareholders to reject an offer of $89 billion from 21st Century Fox as undervaluing the organic growth prospects of the company. Furthermore, AT&T was already highly leveraged. In 2015, AT&T acquired DirectTV for $48.5 billion in cash and stock – a deal that AT&T was still digesting. There were also concerns as the disastrous merger of AOL and Time Warner was still fairly fresh (2009). The AT&T-Time Warner deal was still subject to regulatory approval, and although some had spoken out against the deal, regulators did approve a similar merger of Comcast and NBC Universal back in 2011. With these concerns about the price, strategic fit, debt load, and regulatory approval, many were skeptical of the deal’s efficacy.

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Published

2014-06-30

Issue

Vol. 14 No. 1 (2017)

Section

Cases

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