Is AT&T Looking To Acquire Time Warner?

It appears so, according to a report published by Bloomberg just this week. Officials from AT&T and Time Warner have reportedly been involved in discussions over the past few weeks regarding a potential blockbuster merger between the wireless giant and the media powerhouse. Bloomberg’s report did describe the discussions as more formal in nature -- paying more attention to forging strategic partnerships as opposed to a complete acquisition. But Bloomberg’s sources also suggest that Jeff Bewkes, the chief executive officer of Time Warner, is open to a sell out deal, while Randall Stephenson, the CEO of AT&T, is said to be exploring ways in which AT&T can diversify its business.

For now, it might be too early to assign a monetary value to the possible merger, but almost certainly, it would be worth a huge amount of money. On Thursday, Time Warner stock traded up $3.75 to close at $82.99, which translates to a market capitalization amounting to $64 billion. Now if AT&T is serious about an acquisition, it will have to close its largest merger deal in the last decade. Note that last year, AT&T acquired DirecTV for $49 billion, but Time Warner has proven to be a target that is entirely of another level. Some may remember that about a couple of years ago, Bewkes said no thanks to a $75 billion offer from Rupert Murdoch’s 21st Century Fox. But if AT&T offers a fair deal, Bewkes just might accept the offer.

Looking into the benefits, acquiring Time Warner would be a really good idea for AT&T, especially in terms of providing new content for the wireless carriers subscribers. Time Warner is home to an immense collection of programming brands, including HBO, Cartoon Network, NBA, and many more. If AT&T is keen on transforming itself from a telecoms power player to a true media and entertainment empire, grabbing Time Warner’s existing resources would significantly strengthen its arsenal.

Over the last decade, AT&T has really come a long way, growing from a regional telecoms firm based in Dallas, Texas into the second biggest wireless carrier in all of the United States (second only to industry leader Verizon Wireless in terms of customer base). Recent moves do suggest that the company wants to be more than just a telecoms giant, most notably its purchase of DirecTV in 2015. Is buying Time Warner the logical next step? We will all have to wait and see.