AT&T has reached a deal to buy Time Warner for $85.4 billion as the telecom giant pushes into the entertainment industry.
As part of the merger, AT&T will pay $107.50 per share in a transaction valued at $108.7 billion, including Time Warner's net debt, AT&T said in a statement on Saturday evening.
The merger allows AT&T control over major media brands like CNN, HBO and Warner Bros., along with other channels and websites.
“This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers,” AT&T Chairman and CEO Randall Stephenson said in a statement.
Time Warner Chairman and CEO Jeff Bewkes said the merger would allow the company to accelerate its ability to deliver content to consumers, especially for video content.
"Joining forces with AT&T will allow us to innovate even more quickly and create more value for consumers along with all our distribution and marketing partners, and allow us to build on a track record of creative and financial excellence that is second to none in our industry," he said.
The sale will have to be approved by regulators, a process likely to include both the Federal Communications Commission and the Justice Department.
The announcement Saturday night comes after days of reports about a looming deal. Wireless providers have eyed opportunities to expand while facing the limits of current offerings.
While Verizon has attempted to build an ad-targeting infrastructure aimed at competing with Google and Facebook, AT&T has turned its focus to the entertainment and video industries.