AT&T confident of approval for $85 billion Time Warner buyout

AT&T has promised to use its proposed $85.4 billion purchase of Time Warner to revolutionise mobile entertainment as it unveiled a deal that will unite companies instrumental in the creation of the communications industry, provided it is approved by regulators. The cash and stock deal, worth $107.50 a share, brings together the telephony pioneer started by Alexander Graham Bell with an entertainment group that has its roots in the early days of Hollywood. The acquisition faces at least a year of scrutiny from US competition regulators and possible objections from rival content groups fearful of the combined entity’s market power.

Randall Stephenson, AT&T’s chief executive expressed confidence that regulators would approve the acquisition, saying there was no overlap between the two businesses. “This is not a horizontal deal. This is vertical merger. You would be hardpressed to find examples where vertical mergers have been blocked.” Time Warner has agreed to pay a $1.7 billion break-fee to AT&T if it opts to sell to another buyer while AT&T will pay Time Warner $500 million if regulators block the deal, apparently.