Senior executives at AT&T Inc and Time Warner Inc have met in recent weeks to discuss various business strategies including a possible merger, according to people familiar with the matter.
The talks, which at this stage are informal, have focused on building relations between the companies rather than establishing the terms of a specific transaction, the people said, asking not to be identified as the deliberations are private. Neither side has yet hired a financial adviser, the people said.
Acquiring Time Warner would give AT&T, one of the biggest providers of pay-TV and of wireless and home Internet service in the US, a collection of popular programming to offer to subscribers, from HBO to NBA to the Cartoon Network.
“There’s a lot that’s attractive about Time Warner,” said media industry veteran Peter Chernin, who runs an online video joint venture with AT&T, in an interview on Thursday on CNBC. “I think they’re both great companies.”
He said he did not know anything about a deal.
Time Warner chief executive officer Jeff Bewkes is a willing seller if he gets an offer he thinks is fair, one of the people said.
Bewkes and his board rejected an US$85-a-share approach in 2014 from Rupert Murdoch’s 21st Century Fox Inc, which valued Time Warner at more than US$75 billion.
Representatives for AT&T and Time Warner declined to comment.
AT&T chief executive officer Randall Stephenson has been looking to add more content and original programming as part of his plan to transform the Dallas-based telecommunications company into a media and entertainment giant.
The company’s plan to focus on media and entertainment include companies worth US$2 billion to US$50 billion, people familiar with the plans said earlier this month.
Last year, AT&T paid US$48.5 billion to acquire satellite-TV provider DirecTV, its biggest deal in at least 10 years, according to data compiled by Bloomberg.
AT&T has been developing an Internet-based version of the pay-TV service, called DirecTV Now.
“With the pending launch of the DirecTV Now OTT app, it might make sense to move onto content ownership, but Time Warner is an awfully big first step into the content world,” Bloomberg Intelligence analyst John Butler said in an e-mail.
The results are mixed with blockbuster deals that bring outsiders into the media industry. Comcast Corp has had a largely successful run since acquiring control of NBCUniversal in 2009, but Time Warner itself had one of the most disastrous mergers of all time when it combined with America Online Inc in 2000.
With US$7.2 billion of cash on hand, AT&T does not have enough firepower to make a big deal with cash alone. In the wake of the DirecTV purchase and the US$18 billion it spent in the US federal airwave auction last year, AT&T’s net debt was US$120 billion at the end of June.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by