Shares of AT&T (T - Free Report) edged nearly 1% higher in morning trading Tuesday after company management confirmed that it expects its merger deal with Time Warner (TWX - Free Report) to close by the end of the year.
Because the merger does not include the transfer of government licenses, the Federal Communications Communication is not reviewing the deal, making the regulatory process even easier. “So far no surprises,” said AT&T CEO Randall Stephenson at a Goldman Sachs (GS - Free Report) telecom and media conference today.
The deal, which is valued at $108.7 billion when including Time Warner’s debt, was first announced in October 2016 and represented a major marker in the growing trend of telecom industry consolidation. Of course, traditional cable and media companies have been forced to adapt to changing consumer trends recently, and joining forces has proven to be one popular strategy.
Stephenson also discussed how AT&T and Time Warner can mutually benefit from each other. One of the market’s top prevailing theories is that Time Warner will parlay AT&T’s viewership data to make more educated decisions about the projects it chooses to fund.
“We have some amazing viewership data,” Stephenson said. “What will be interesting is how a media executive can take a look at this data and how can it begin to influence their decision making. I don't think Steven Spielberg is replaced by big data.”
On top of this, Stephenson suggested that improving Time Warner’s ad rates would be a main priority for his company. The chief executive said that if AT&T can get $10 in advertising revenues every month, it could hypothetically cut the cost of its service in an effort to attract new customers.
Stephenson also touched on his hope that the White House and Congress can restructure the corporate tax code soon, saying that it would be a “crying shame” if tax cuts didn’t get done by the end of the year.
“You would be hard-pressed to find someone in Washington in the House or Senate who doesn't believe we have to restructure the corporate tax code,” he said.
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