Managers of the American telecommunications giant AT&T and the media conglomerate Time Warner have discussed various business strategies, including a possible merger, Bloomberg learned from sources familiar with the situation. Neither party has yet engaged financial advisors, Bloomberg reports, and numerous other global agencies have echoed this. Both AT&T and Time Warner declined to comment on these reports.
Time Warner is an attractive target as it owns the cable channel HBO, the news network CNN, the film studio Warner Bros, and many other media assets. Telecommunications companies, on the other hand, have been entering the media business in recent years to expand their operations and gain access to valuable content. For instance, Comcast Corp acquired NBCUniversal and DreamWorks Animation, thereby gaining significant power that controls not only how television content and films are produced but also the pathways of that content to viewers.
Ownership of larger content gives cable and telecom companies a greater advantage, as users seek fewer, curated cable contents or watch them online. AT&T, which sells mobile phones and broadband services, is aggressively expanding and aims to become a powerful media company. Last year, it acquired the television company DIRECTV for $48.5 billion.
Time Warner CEO Jeff Bewkes has so far been unwilling to sell the company, having rejected a takeover offer from Twenty-First Century Fox worth $80 billion two years ago. However, analysts believe Bewkes may now change his mind, given the rapid pace of consolidation in the media sector, as well as the fact that Time Warner’s two major competitors, Viacom and CBS, are considering the possibility of merging.
The market value of Time Warner is approximately $65 billion, while AT&T’s is nearly $240 billion.
