AT&T made a deal to buy Time Warner for $85 billion, which would make it the nation's largest entertainment company and a major force in Hollywood, a person familiar with the deal said Saturday.
The agreement, which was sealed at breakneck speed and expected to be announced late Saturday, accelerates the wave of consolidation in the telecommunications and media industries.
AT&T agreed to pay about $107 a share to Time Warner investors in the cash-and-stock deal, the source said.
By adding Time Warner's expansive portfolio, which includes Hollywood's largest film and television studio, Warner Bros., and such TV channels as HBO, CNN, Cartoon Network, TBS and TNT, the bulked-up AT&T would surpass Walt Disney Co. and Comcast, which owns NBCUniversal.
Even before the deal was announced, critics blasted it, ensuring that it will face considerable scrutiny in Washington. The combination must be approved by regulators including the U.S. Department of Justice, posing an early test for the winner of the presidential election.
In a speech in Gettysburg, Pa., outlining his priorities for his first 100 days in office, Republican candidate Donald Trump said buying Time Warner would give AT&T "too much concentration of power."
"We'll look at breaking this deal up," he said.
Mark Lemley, a professor at Stanford Law School and director of the Stanford Program in Law, Science and Technology, said Saturday that the deal raises "very significant" antitrust concerns.
"I would be surprised if the antitrust authorities let this one pass," Lemley said.
The takeover of Time Warner is AT&T's second substantial foray into entertainment. Last year, the company spent $49 billion to buy DirecTV and immediately became the nation's largest pay-TV provider with more than 25 million customers.
AT&T Chairman and CEO Randall Stephenson is betting his company will be better equipped to ride out the industry's challenges if it owns premium entertainment properties and more of the programming that it delivers to its DirecTV and mobile-phone customers.
