AT&T → Time Warner
AT&T's purchase of Time Warner — $85.4bn of equity, $108.7bn including debt — put HBO, CNN and Warner Bros. inside America's biggest pay-TV distributor, survived the first federal attempt in nearly 40 years to stop a vertical merger, and was undone less than four years after it closed.
Worth $108.7bn including debt and cleared after the Department of Justice lost its court challenge; the assets were spun out in 2022.
- Value
- $85.4B
- Announced
- October 2016
- Completed
- June 2018
- Sector
- Media
- Deal type
- acquisition
- Acquirer
- AT&T (United States)
- Target
- Time Warner (United States)
Why it mattered
AT&T had bought DirecTV in 2015 and wanted to own the content it carried, not only the pipes. Time Warner offered the Turner networks (TNT, TBS, CNN), HBO and the Warner Bros. studio. The agreement of 22 October 2016 paid $107.50 a share, half in cash and half in AT&T stock within a collar, financed partly by a $40bn bridge loan, with $1bn of annual cost savings promised within three years.
The obstacle was Washington. Time Warner's shareholders approved the deal in February 2017 and the European Commission cleared it that March, but on 20 November 2017 the Justice Department sued to block it. After a six-week trial Judge Richard Leon ruled on 12 June 2018 that the government had not proved harm to consumers, and AT&T closed two days later. Its own share price had fallen, so the total consideration came to $79.1bn, including $42.1bn in cash and $36.6bn in AT&T stock. The Justice Department appealed, and on 26 February 2019 the D.C. Circuit unanimously upheld the ruling.
What it left behind
The legal victory did not make the strategy work. Renamed WarnerMedia, the business sat inside a company whose debt WarnerMedia's new chief, John Stankey, put at $180bn; in September 2019 the activist Elliott Management took a $3.2bn stake and attacked the diversification. AT&T committed $2bn a year to HBO Max, then changed course: on 17 May 2021 it agreed to spin WarnerMedia off and merge it with Discovery. The transaction completed on 8 April 2022, leaving AT&T shareholders with about 71% of Warner Bros. Discovery and AT&T with about $38.9bn of net cash plus $1.6bn of debt assumed by the new company. Warner Bros. Discovery started with more than $43bn of debt, lost over 60% of its value by early 2025, planned a split, and put itself up for auction: after a contest with Netflix, Paramount Skydance agreed in February 2026 to pay $31 a share, a deal still awaiting completion on 29 September 2026. Surviving an antitrust challenge proves that a merger is lawful, not that it is wise; a vertical deal still needs the buyer to be a natural owner of what it buys.