AT&T Closes Acquisition Of Time Warner

( - AT&T Inc. ( T ) said that it has completed its acquisition of Time Warner Inc., bringing together global media and entertainment leaders Warner Bros., HBO and Turner with AT&T's leadership in technology and its video, mobile and broadband customer relationships.

"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," said Randall Stephenson, chairman and CEO of AT&T Inc.

AT&T Inc. consists of four businesses. They are AT&T Communications, AT&T's media business, AT&T International, and AT&T's advertising and analytics business.

AT&T Communications provides mobile, broadband, video and other communications services to U.S.-based consumers and nearly 3.5 million companies - from the smallest business to nearly all the Fortune 1000 - with highly secure, smart solutions. Revenues from these services totaled more than $150 billion in 2017. AT&T's media business consists of HBO, Turner and Warner Bros. Together, these businesses had revenues of more than $31 billion in 2017. A new name for this business will be announced later.

AT&T International provides mobile services in Mexico to consumers and businesses, plus pay-TV service across 11 countries in South America and the Caribbean. It had revenues of more than $8 billion in 2017.

AT&T's advertising and analytics business provides marketers with advanced advertising solutions using valuable customer insights from AT&T's TV, mobile and broadband services, combined with extensive ad inventory from Turner and AT&T's pay-TV services. A name for this company will be announced in the future.

Jeff Bewkes, former chairman and Chief Executive Officer of Time Warner Inc., has agreed to remain with the company as a senior advisor during a transition period.

The four businesses and reporting to Stephenson will be: John Donovan, CEO of AT&T Communications; John Stankey, CEO of AT&T's media business; Lori Lee, CEO of AT&T International and Global Marketing Officer of AT&T Inc.; and, Brian Lesser, CEO of AT&T's ad and analytics business.

All of Jeff Bewkes' direct reports will now report to John Stankey.

Under the terms of the merger, Time Warner Inc. shareholders received 1.4 shares of AT&T common stock, in addition to $53.75 in cash, per share of Time Warner Inc. As a result, AT&T issued 1.185 billion shares of common stock and paid $42.5 billion in cash. Including net debt from Time Warner, we now have $180.4 billion in net debt.

AT&T said it will begin consolidating Time Warner Inc. results effective June 15, 2018.

The company expects the acquisition to provide significant financial benefits: Accretive year-one adjusted earnings per share and free cash flow; strengthened dividend coverage Increased synergies to $2.5 billion.

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