It's Official: AT&T Completes $85 Billion Purchase of Time Warner

After a judge ruled in AT&T’s favor on Tuesday in the Department of Justice’s antitrust suit against the company—approving its merger with Time Warner—AT&T wasted no time in moving forward with the deal, completing its $85 billion purchase Thursday evening. The merger, which has been in the works since October 2016, combines AT&T’s robust broadband (U-Verse), wireless (AT&T), satellite (DirecTV) and streaming live TV (DirecTV Now) offerings with Time Warner’s hefty film and TV properties (including Warner Bros., HBO, TNT, TBS and CNN). “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,” AT&T chairman and CEO Randall Stephenson 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.” Stephenson sent a memo to his new Time Warner employees Thursday night, promising them “you have my word that you will continue to have the creative freedom and resources to keep doing what you do best." The combined company consists of four businesses: mobile/broadband/video provider AT&T Communications (led by CEO John Donovan); AT&T’s media businesses, which include HBO, Warner Bros. and Turner (led by CEO John Stankey; a new name for this business will be announced at a later time); AT&T International (provides mobile services in Mexico and pay-TV services in South America and the Caribbean; led by CEO Lori Lee, who is also AT&T’s global marketing office); and AT&T’s advertising and analytics business (led by CEO Brian Lesser; a name for this business will be announced later). Time Warner Chairman and CEO Jeff Bewkes will remain with the company as a senior adviser during the transition period, before departing the company. All of his direct reports, which include Turner CEO John Martin and HBO CEO Richard Plepler, will now report to Stankey. UPDATE: In a memo to staffers on Friday afternoon, Stankey announced that Martin will be leaving the combined company and that the former Time Warner brands and businesses will be known as WarnerMedia going forward. The DOJ had sued to block the merger in November, claiming it would give AT&T too much control and raise costs for consumers. But after a six-week trial that concluded in April, U.S. District Judge Richard Leon approved the AT&T-Time Warner deal with no conditions. Leon has also said that should the DOJ ask for a stay, he would deny the request. The Justice Department could have sought an injunction but announced yesterday that it chose not to. But it is still considering filing an appeal, which it can do up to 60 days after the merger. AT&T and Time Warner needed to act quickly after Leon’s verdict, as their merger agreement was set to expire on June 21. Time Warner would have received a $500 million breakup fee if the merger did not go forward. This will be the first of several likely mega media mergers in light of Leon’s ruling. Already, Comcast has announced a $65 billion all-cash rival bid for 21st Century Fox, looking to upend Disney’s deal with Rupert Murdoch’s company. And companies like CBS, Lionsgate, Viacom, Discovery Inc. (which recently merged with Scripps) and A&E Networks are expected to be in play as Silicon Valley and Hollywood companies add scale to compete with Netflix, Google and Facebook.