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October 21, 2016

AT&T and Time Warner discuss merger as telcos seek exclusive content

Time Warner has been approached numerous times for merger deals, including a reported discussion with smartphone giant Apple.

By Alexander Sword

AT&T and Time Warner have reportedly been in discussions about a possible merger, as the gap between telecoms and media companies increasingly blur.

The merger was discussed as part of a consideration of various business strategies, according to the report in Bloomberg.

Currently the talks are informal and aimed at building relations between the two companies as opposed to establishing the terms for a specific transaction.

Since the news broke, Time Warner shares have risen 4.7 percent while AT&T shares have dipped less than 1 percent.

Warner bros

Time Warner owns the Looney Tunes characters.

For AT&T, the acquisition of Time Warner, which owns Looney Tunes amongst other popular programmes, would give it a wide range of content to offer to customers. For example, shows developed with Warner Bros or other intellectual property could be bundled with its telecoms services.

AT&T completed its $49-billion acquisition of DirecTV in July 2015.

Time Warner is worth around $65 billion, while AT&T is worth around $250 billion.

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Time Warner’s merger with internet company AOL (since acquired by Verizon) in the early 2000s was called “the biggest mistake in corporate history” by CEO and Chairman in a Telegraph interview. It led to massive write-downs and eventually a de-merger agreement.

Time Warner rejected a bid in 2014 from Rupert Murdoch’s 21st Century Fox, which valued it at more than $75 billion.

Earlier this year, tech giant Apple reportedly considered buying the company as part of its move into producing its own content.

Apple

Apple reportedly considered buying Time Warner.

Eddy Cue, who oversees the iTunes store, Apple Music and iCloud discussed the idea while meeting Olaf Olafsson, the head of corporate strategy at Time Warner, according to sources reported in the Financial Times. This took place during a meeting to discuss commercial possibilities such as the inclusion of Time Warner channels in Apple’s video streaming service.

These talks did not progress beyond preliminary stages and never involved the CEOs of either company.

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