AT&T Agrees in Principle to buy Time Warner for $85 billion

AT&T has agreed in principle to buy Time Warner for $85 billion in one of the world’s largest mergers of media houses in history. The merger, which is expected to be concluded in 2017, is expected to spur more mergers in the near future.

The expected merger is a short in the arm for the soon to be launched AT&T’s DirectTV Now. DirectTV Now, which is expected to stream at least 100 live channels online, will offer stiffer competition against the likes of Sling TV and Hulu TV. Its subscribers are set to enjoy better pricing and packages. Thus, subscribers can now expect to enjoy more quality channels offered at the same low price point.

The acquisition has stirred excitement in the corporate world, especially for the fact that it comes just weeks before the US elections, hence attracting heightened political sentiments. Trump, for example, claims that such a merger concentrates power in the hands of a few. He has sworn to fight it if elected. Hence the merger is a sign of confidence in the corporate world, given the tangible anxiety due to Brexit, China’s economic slump, rising cyber attacks and Russia’s military build-up in the Middle East.

However, the merger faces a stern test of approval from regulators, with Washington expected to weigh the pros and cons for both the short term and long term before granting it the green light.The murky waters of politics notwithstanding, the stability of the industry is on the test.

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