8-KAcquisitions & DispositionsFinancial EventsOther Events+1

AT&T INC. 8-K Report, Acquisition Completed (Jun 15, 2018)

Filed June 15, 2018For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. has officially completed its acquisition of Time Warner Inc. through a merger finalized on June 14, 2018. The transaction involved AT&T issuing approximately 1.185 billion shares of its common stock and paying $53.75 in cash for each Time Warner share, with an aggregate implied value of $81.0 billion based on AT&T's closing stock price. This acquisition integrates Time Warner's extensive content assets, including Warner Bros., HBO, and Turner, into AT&T's existing telecommunications and media platforms, marking a significant strategic shift for the company. As a result of the merger, Time Warner's common stock will be delisted from the New York Stock Exchange. AT&T will begin reporting Time Warner's operating results from June 15, 2018. The company also assumed significant debt from Time Warner, totaling approximately $16.4 billion and €700 million in notes and debentures, along with $1.77 billion in debt from Historic TW Inc. To finance a portion of the cash consideration, AT&T drew down $16.175 billion and $2.5 billion under separate term loan agreements, and incurred approximately $7.9 billion in debt under its commercial paper program.

Key Highlights

  • 1Completion of the acquisition of Time Warner Inc. by AT&T Inc. on June 14, 2018.
  • 2The merger consideration included approximately 1.185 billion shares of AT&T common stock and $53.75 in cash per Time Warner share.
  • 3The total implied value of the transaction was approximately $81.0 billion, based on AT&T's stock price.
  • 4AT&T assumes substantial Time Warner debt, including $16.408 billion and €700 million in notes and debentures, and $1.77 billion in Historic TW Inc. debentures.
  • 5AT&T financed a significant portion of the cash consideration through new term loans totaling $18.675 billion and $7.9 billion in commercial paper.
  • 6Time Warner's common stock (TWX) has been delisted from the NYSE.
  • 7AT&T has committed to operating Turner Networks as a distinct business unit, separate from AT&T Communications, with firewalls in place for information exchange regarding pricing and terms with distributors.
  • 8AT&T will consolidate Time Warner's operating results starting June 15, 2018.

Frequently Asked Questions

The main event is the official completion of AT&T's acquisition of Time Warner Inc. through a merger that was finalized on June 14, 2018.

The total implied value of the acquisition was approximately $81.0 billion. This was comprised of roughly $38.5 billion in AT&T stock and $42.5 billion in cash. AT&T financed a portion of the cash through new term loans totaling $18.675 billion and incurred approximately $7.9 billion in commercial paper debt.

Time Warner's common stock is being delisted from the New York Stock Exchange. AT&T will now consolidate Time Warner's operating results starting June 15, 2018, and has assumed Time Warner's existing debt obligations.

AT&T has committed to managing the Turner networks (which include CNN, TNT, TBS, etc.) as a separate business unit, distinct from AT&T Communications. This involves implementing firewalls to prevent the exchange of non-public information related to pricing and contract terms with unaffiliated programmers or distributors.