Shareholders of Time Warner Inc. voted to sell the company to AT&T Wednesday for $85.4 billion.
The stockholders that represent about 79% of the Time Warner shares approved the merger contract.
The cash and stock deal would turn the Dallas-based AT&T into a TV and phone giant with such outstanding media connections such as Cartoon Network, Warner Bros. studio, CNN, and HBO. AT&T has proven their love of gaining new properties as the mobile phone market grows. About two years ago AT&T bought DirecTV, making it the country’s biggest pay-TV company.
The Time Warner-AT&T deal would put a stop to independently owning the third-largest entertainment business in the nation.
However, the deal must win the vote of the U.S. Department of Justice and maybe even the Federal Communications Commission.
Time Warner Inc. began with Time Inc. magazine, Ted Turner’s collection of cable TV channels, and the legendary Warner Bros. studio that the four Warner brothers created over a century ago.
However, in the last decade Time has rid themselves of slow-growing assets such as AOL, magazines, and the old pay-TV service Time Warner Cable. The changes have hurt their reputation. Some say the company is the largest media merger failure in history. Due to the company slimming down, Bewkes took advantage of the opportunity.
Over two years ago Time Warner denied 21st Century Fox from buying the company. But then they came to a more appealing agreement with AT&T on October 22 of $107.50 per share. The price deal was 35% more than Time Warner’s shares were trading at a week prior to the deal.
Bewkes told shareholders that they feel that the deal is great financially and strategically. And with the video market changing, it’s important to not only have great shows but a great customer experience.
Time Warner and AT&T are preparing for more chaos in the media industry as consumers cut down on their cable bundles and choose other options to avoid commercials.
Shareholders also approved a compensation contract to rank Time Warner executives. They expect the three division company heads to remain.
Wall Street assumes that the deal is on. Time Warner shares are closing around $96.32, the highest levels they’ve had in five years.