Challenge for rivals

AT&T’s £65bn bid will test new Washington regime

AT&T’s mega takeover offer for Time Warner will be a major first test of competition policy for the new regime in the White House.

It will also prove a big challenge for other players in the sector, not least Verizon.

On Saturday, AT&T announced it was buying the parent company of CNN, TNT, HBO and Warner Bros for $85bn (£65bn). With debt included, the deal totals $109 billion.

It brings together a mobile and broadband company with a major content provider which is behind blockbusters such as the Harry Potter and Game of Thrones franchises.

With smartphone ownership reaching saturation point and data plans showing little growth telecoms firms are looking for expansion elsewhere.

This deal presents a challenge of AT&T’s rival Verizon which has been doing its own mopping up of businesses including AOL and Yahoo. It has also bought businesses in the Internet of Things and cars markets.

But their acquisition strategies are quite different. Verizon is attempting to build a billion-user media business to rival Facebook and Google for online advertising sales.

AT&T is looking to create a TV and movie monolith.

In other words, Verizon is keen to rekindle and build its wireless business while AT&T is making moves into other sectors.

As these two giants lock horns and the deals get bigger the regulators will take increasing notice. Donald Trump, the presidential candidate, has already said he would block the AT&T deal if he gets elected to the White House.





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