AT&T wasted little time in officially wrapping up its $85 billion acquisition of Time Warner, a name which AT&T will ditch in favor of a new moniker for its media business.
“The content and creative talent at Warner Bros., HBO and Turner are first-rate. Combine all that with AT&T’s strengths in direct-to-consumer distribution, and we offer customers a differentiated, high-quality, mobile-first entertainment experience,” said Randall Stephenson, chairman and CEO of AT&T, in a statement. “We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”
AT&T said its business is now divided into four segments: communications, media, international, and advertising and analytics. John Donovan, CEO of AT&T Communications, will oversee the company’s mobile, broadband, video and other services; John Stankey, CEO of AT&T’s media business, will oversee HBO, Turner and Warner Bros.; Lori Lee, CEO of AT&T International and CMO, will run the company’s operations outside of the U.S.; and Brian Lesser, CEO of AT&T ad and analytics business, will work on advanced advertising based on data from AT&T’s TV, mobile and broadband services will manage ad inventory from Turner and AT&T’s pay-TV services.
AT&T said both the media and ad and analytics businesses will get new names.
Jeff Bewkes, former chairman and CEO of Time Warner, is sticking around as a senior advisor during the transition period, and all his direct reports now answer to Stankey.
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AT&T also provided an update on the deal terms and financial results moving forward. The company ended up issuing 1.185 billion shares of AT&T common stock and paying $42.5 billion in cash to Time Warner shareholders. Following the deal, AT&T now had $180.4 billion in net debt.
With Time Warner’s results expected to be consolidated with AT&T beginning today, the company expects accretive year-one EPS and free cash flow and synergies in the $2.5 billion range, stemming from $1.5 billion in annualized cost synergies and $1 billion in annualized revenue synergies, both kicking in by the end of year three after the merger closes.