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After Time Warner Deal, AT&T Could Become One Mean Media Machine

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It looks like the deal between AT&T Inc. T and Time Warner TWX is finally moving past speculation. The telecom giant has agreed to acquire the media company in an $85.4 billion cash-and-stock deal. Under the terms of the deal, Time Warner shareholders will receive $107.50 per share, comprising $53.75 in cash and $53.75 in AT&T stock.

However, it seems that Wall Street is not liking the deal, as both T and TWX stock have taken a hit in trading on Monday. As of 11:00 AM CT, shares of TWX are down 2.15% to $87.56 per share while T stock is down around 2.2% to $36.65 per share.

While the announcement of the deal has drawn criticism from not only analysts and investors, but also lawmakers, other media rivals, and even politicians—including Donald Trump, Hillary Clinton, and Democratic vice presidential nominee Tim Kaine—over regulatory concerns, the proposed merger would create a huge media conglomerate.

AT&T is the second-largest telecom operator in the U.S., with a large presence in both the wireless and landline sectors. It also acquired the leading satellite TV operator, DirecTV, becoming the largest pay-TV operator in the country.

Time Warner is long been one of the six biggest media companies of the U.S., and its content list would be an impressive, lucrative addition to AT&T. There’s Home Box Office Inc., otherwise known as HBO, which is home to fan-favorited and critically-acclaimed television shows like Game of Thrones, Veep, and Silicon Valley, among many others past and present. Time Warner also owns Turner Broadcasting System, which owns TV channels like TBS, Cartoon Network, CNN, TCM, and TNT.

AT&T will also get ownership of Warner Bros. Entertainment, a movie studio behemoth. Warner Bros. owns Disney’s DIS Marvel rival DC Entertainment, New Line Cinema, and Warner Bros. Television Group, home to popular network The CW, among others. Time Warner also owns Time Inc., a major New York-based publishing company, which publishes magazines like Fortune, People, InStyle, Sports Illustrated, and its namesake publication, Time.

With this diverse, money-making line-up heading straight to AT&T’s doorstep, the wireless provider is set to become not just a content provider but also a content creator, a media machine following in the steps of Comcast (CMCSA) and its acquisition of NBCUniversal. Because of the similarities, there is speculation the AT&T-Time Warner deal will lead to other media companies merging. Disney, Viacom VIA, CBS Corp. , and News Corp. NWSA are the other media giants in the U.S., and it would not come out of left field if one of these corporations makes a takeover bid for the others.

This is not the first time AT&T has made a bid for a mega merger. Back in 2011, the company tried to buy T-Mobile TMUS, but the deal was ultimately rejected, as it would have created a wireless industry titan. In the case of the Time Warner deal, AT&T will have different regulatory concerns to worry over. While both companies can look towards the Comcast-NBCUniversal deal as an example—and most importantly, an example of approval—a merger between AT&T and Time Warner will likely garner just as much criticism and scrutiny.

The deal, however, has yet to be approved, and the FCC could very well block the transaction. And as the New York Times points out, “the merged business would have about $175 billion of debt, making it bigger than some financial institutions.” This, if anything, is one of the riskiest parts of the acquisition, and a good reason to say no to the biggest maybe mega company of the year.

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