AT&T Buys Time Warner Pending Regulatory Decision

AT&T Buys Time Warner Pending Regulatory Decision

AT&T Buys Time Warner Pending Regulatory Decision: Cartoon Network Will (Probably) Have A New Owner By The End Of 2017

Time Warner (owners of Warner Bros, HBO and Turner) has agreed to be acquired by American telecommunications and satellite TV giant AT&T (American Telephone and Telegraph Company) for $85.4 billion, which could make it one of the largest media corporate takeovers ever. The acquisition deal was announced on Saturday evening (22/10/2016). AT&T buying Time Warner will more than likely change the way Turner and Warner Bros. is managed, this includes: Cartoon Network and its international variants along with Boomerang and sister channels, Cartoon Network Studios and Warner Bros. Animation.

Time Warner has been looking for a buyer for a few years now, Rupert Murdoch’s 21st Century Fox tried to buy the company a couple of years ago. In recent years, Time Warner has been spinning off various divisions of the company, including Warner Music, AOL, Time Warner Cable and Time Publishing to focus more on their television and movie content production divisions, Warner Bros., Turner and HBO. AT&T and Time Warner have been in talks since August, with numerous meetings between Jeff Bewkes (Chairman and CEO of Time Warner) and Randall Stephenson (Chairman and CEO of AT&T).

AT&T can trace its history all the way back to the Bell Telephone Company, a company founded by the inventor of the telephone – Alexander Graham Bell in 1875, the company grew to become one of the largest landline, mobile telephone and broadband internet service companies in the United States. AT&T has a complex history, with mergers, demergers and remergers, even AT&T spinoff SBC took over AT&T and re-branded their whole company as AT&T. AT&T wanted to buy Time Warner because of its television and movie content, they purchased the largest satellite television provider in the United States – DirecTV in 2015 and they want a content division to run alongside its home and mobile media distribution division.

The takeover is very similar to the Comcast/NBC Universal merger in 2011, a cable television company buying a TV and movie business. If the AT&T merger gets approval from the U.S. Department of Justice, I hope that there won’t be any changes to the way the ex-Time Warner entertainment part of the business is run and is kept separately with the same management which has the right expertise. AT&T is first and foremost a telecommunications company and they purchased Time Warner because its content is attractive to their company and shareholders as it has potential to make a profit for their distribution business, it would be incredibly unwise to start making changes to a media company when AT&T has little to no experience in the media sector and to start making job losses.

All we can do is wait and see what happens next as the deal is expected to be completed in late 2017.

AT&T Announces Time Warner Acquisition Video

News Report By CNN

From The AT&T and Time Warner Press Release

From The Time Warner Website:

From The AT&T Website:

AT&T Inc. (NYSE:T) and Time Warner Inc. (NYSE:TWX) today announced they have entered into a definitive agreement under which AT&T will acquire Time Warner in a stock-and-cash transaction valued at $107.50 per share. The agreement has been approved unanimously by the boards of directors of both companies.

The deal combines Time Warner’s vast library of content and ability to create new premium content that connects with audiences around the world, with AT&T’s extensive customer relationships, world’s largest pay TV subscriber base and leading scale in TV, mobile and broadband distribution.

“This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers,” said Randall Stephenson, AT&T chairman and CEO. “Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen. A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that. We intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications. With great content, you can build truly differentiated video services, whether it’s traditional TV, OTT or mobile. Our TV, mobile and broadband distribution and direct customer relationships provide unique insights from which we can offer addressable advertising and better tailor content,” Stephenson said. “It’s an integrated approach and we believe it’s the model that wins over time. “Time Warner’s leadership, creative talent and content are second to none. Combine that with 100 million plus customers who subscribe to our TV, mobile and broadband services – and you have something really special,” said Stephenson. “It’s a great fit, and it creates immediate and long-term value for our shareholders.”

Time Warner Chairman and CEO Jeff Bewkes said, “This is a great day for Time Warner and its shareholders. Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalize on the tremendous opportunities created by the growing demand for video content. That’s been one of our most important strategic priorities and we’re already making great progress — both in partnership with our distributors, and on our own by connecting directly with consumers. Joining forces with AT&T will allow us to innovate even more quickly and create more value for consumers along with all our distribution and marketing partners, and allow us to build on a track record of creative and financial excellence that is second to none in our industry. In fact, when we announce our 3Q earnings, we will report revenue and operating income growth at each of our divisions, as well as double-digit earnings growth.

Bewkes continued, “This is a natural fit between two companies with great legacies of innovation that have shaped the modern media and communications landscape, and my senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences.”

Time Warner is a global leader in media and entertainment with a great portfolio of content creation and aggregation, plus iconic brands across video programming and TV/film production. Each of Time Warner’s three divisions is an industry leader: HBO, which consists of domestic premium pay television and streaming services (HBO Now, HBO Go), as well as international premium & basic pay television and streaming services; Warner Bros. Entertainment, which consists of television, feature film, home video and videogame production and distribution. Warner Bros. film franchises include Harry Potter & DC Comics, and its produced TV series include Big Bang Theory and Gotham; Turner consists of U.S. and international basic cable networks, including TNT, TBS, CNN and Cartoon Network/Adult Swim. Also, Turner has the rights to the NBA, March Madness and MLB. Time Warner also has invested in OTT and digital media properties such as Hulu, Bleacher Report, and Fandango.

Customer Benefits

The new company will deliver what customers want — enhanced access to premium content on all their devices, new choices for mobile and streaming video services and a stronger competitive alternative to cable TV companies.

With a mobile network that covers more than 315 million people in the United States, the combined company will strive to become the first U.S. mobile provider to compete nationwide with cable companies in the provision of bundled mobile broadband and video. It will disrupt the traditional entertainment model and push the boundaries on mobile content availability for the benefit of customers. And it will deliver more innovation with new forms of original content built for mobile and social, which builds on Time Warner’s HBO Now and the upcoming launch of AT&T’s OTT offering DIRECTV NOW.

Owning content will help AT&T innovate on new advertising options, which, combined with subscriptions, will help pay for the cost of content creation. This two-sided business model — advertising- and subscription-based — gives customers the largest amount of premium content at the best value.

Summary Terms of Transaction

Time Warner shareholders will receive $107.50 per share under the terms of the merger, comprised of $53.75 per share in cash and $53.75 per share in AT&T stock. The stock portion will be subject to a collar such that Time Warner shareholders will receive 1.437 AT&T shares if AT&T’s average stock price is below $37.411 at closing and 1.3 AT&T shares if AT&T’s average stock price is above $41.349 at closing.

This purchase price implies a total equity value of $85.4 billion and a total transaction value of $108.7 billion, including Time Warner’s net debt. Post-transaction, Time Warner shareholders will own between 14.4% and 15.7% of AT&T shares on a fully-diluted basis based on the number of AT&T shares outstanding today.

The cash portion of the purchase price will be financed with new debt and cash on AT&T’s balance sheet. AT&T has an 18-month commitment for an unsecured bridge term facility for $40 billion.

Transaction Will Result in Significant Financial Benefits

AT&T expects the deal to be accretive in the first year after close on both an adjusted EPS and free cash flow per share basis.

AT&T expects $1 billion in annual run rate cost synergies within 3 years of the deal closing. The expected cost synergies are primarily driven by corporate and procurement expenditures. In addition, over time, AT&T expects to achieve incremental revenue opportunities that neither company could obtain on a standalone basis.

Given the structure of this transaction, which includes AT&T stock consideration as part of the deal, AT&T expects to continue to maintain a strong balance sheet following the transaction close and is committed to maintaining strong investment-grade credit metrics.

By the end of the first year after close, AT&T expects net debt to adjusted EBITDA to be in the 2.5x range.

Additionally, AT&T expects the deal to improve its dividend coverage and enhance its revenue and earnings growth profile.

Time Warner provides AT&T with significant diversification benefits:

Diversified revenue mix — Time Warner will represent about 15% of the combined company’s revenues, offering diversification from content and from outside the United States, including Latin America, where Time Warner owns a majority stake in HBO Latin America, an OTT service available in 24 countries, and AT&T is the leading pay TV distributor.
Lower capital intensity — Time Warner’s business requires little in capital expenditures, which helps balance the higher capital intensity of AT&T’s existing business.
Regulation — Time Warner’s business is lightly regulated compared to much of AT&T’s existing operations.

The merger is subject to approval by Time Warner Inc. shareholders and review by the U.S. Department of Justice. AT&T and Time Warner are currently determining which FCC licenses, if any, will be transferred to AT&T in connection with the transaction. To the extent that one or more licenses are to be transferred, those transfers are subject to FCC review. The transaction is expected to close before year-end 2017.

Conference Call/Webcast

On Monday, October 24, at 8:30 am ET, AT&T and Time Warner will host a webcast presentation to discuss the transaction and AT&T’s 3Q earnings. Links to the webcast and accompanying documents will be available on both AT&T’s and Time Warner’s Investor Relations websites. AT&T has cancelled its previously scheduled call to discuss earnings, which had been set for Tuesday, October 25.

Cartoon Network Asia-Pacific And AIA Malaysia Team Up For Move It Movement Campaign

Cartoon Network Asia-Pacific And AIA Malaysia Team Up For Move It Movement Campaign

Cartoon Network Asia-Pacific And AIA Malaysia Team Up For Move It Movement Campaign

Life insurance company AIA Malaysia has teamed up with Turner Asia Pacific to create the Cartoon Network Move it Movement health campaign. The Cartoon Network Move it Movement event – presented by AIA Vitality in Kuala Lumpur, Malaysia on Friday 9th December to Sunday 11th December will feature mental and physical games, health check-ups, food and nutrition quizzes, and an opportunity to meet and greet Ben Tennyson from Ben 10 and The Powerpuff Girls. The purpose of the event is to increase the awareness of people’s health (from exercise to a balanced diet) and Cartoon Network is helping to add a bit of fun factor to the campaign in an attempt to get kids (and adults) fit and healthy.

According to research from AIA, two-thirds of children in Southeast Asia regularly enjoy watching cartoons with their parents, research from AIA also states that Malaysia’s younger generation tend to know more about their parents’ health than they do themselves.

Thomas Wong, chief marketing officer of AIA commented on the importance of the campaign:

“We are excited about this collaboration with Turner and Cartoon Network to drive awareness on the importance of health and fitness in Malaysia. As a leading insurer in Malaysia, we are committed to putting ‘life’ at the heart of life insurance. To do this, we will play a more active role in empowering and enabling our customers and the community to take better care of their health. This campaign is a fun way for us to reach out to families and inspire them to make positive, sustainable changes to their lifestyle that will translate to better health.”

Phil Nelson, managing director of Turner Asia-Pacific explains that Cartoon Network is the perfect partner to help run the Move It Movement Campaign:

“Cartoon Network is the perfect partner for AIA to introduce kids to a conversation around health, fitness and lifestyle, where they can play a key role in influencing the entire family’s well-being. We can use the power of the Cartoon Network brand to inspire kids and parents to make healthy choices and build healthy habits together. Turner’s creative team has a wealth of experience partnering with progressive, innovative brands that recognize the tremendous influence of kids on all aspects of family life and parent decision making.”

Cartoon Network Asia Pacific Acquires Oggy And The Cockroaches Season 6 And 7

Cartoon Network Asia Pacific Acquires Oggy And The Cockroaches Season 6 And 7

Cartoon Network Asia Pacific Acquires Oggy And The Cockroaches Season 6 And 7

Turner Asia-Pacific have acquired the broadcasting rights to Season 6 and 7 of Xilam Animation’s Oggy and The Cockroaches. More information about season six and seven has also been released. The new seasons of Oggy And The Cockroaches will be made in 4K screen resolution and will air on Cartoon Network, Boomerang and Pogo feeds across the Asia-Pacific region. The new deal secures Turner’s rights over the show, after also acquiring the fifth season last December.

In season five, Oggy and the Cockroaches will travel back in time and meet historical and mythological figures such as Caesar, Leonardo da Vinci and the Cyclops. Seasons 6 and 7 will be a mixture of brand-new episodes with full remakes of classic episodes from the first two seasons, all produced in 4K.

Mark Eyers, Chief content officer for Turner Asia Pacific kids channels commented:

“We all know that cockroaches have some serious survival skills, and there’s just something about Oggy and his mischievous friends that continues to connect with kids. By extending the relationship with Xilam, Turner has kept hold of a proven hit to further boost its leadership position in the region.”

Marc du Pontavice, the founder and CEO of Xilam Animation mentioned that he was thrilled that the Oggy And The Cockroaches partnership with Turner will continue:

“Oggy’s worldwide success continues to hit new highs, and we are thrilled to pursue the partnership with Turner and Cartoon Network that helped build and expand Oggy as a phenomenon throughout Asia.”

Special thanks to the Daily Nick for the update: