Closing the deal this year
AT&T executives are not only confident of closing the transaction, but they also believe that the wait will soon end. In September, AT&T CEO Randall Stephenson told investors and analysts at an industry conference that he expected the transaction to close this year, reiterating a comment he had made earlier.
AT&T has held talks with the US Department of Justice about its deal to acquire Time Warner. The deal has been approved by regulators in Chile and Mexico. Regulators in Brazil (EWZ) are also reviewing the deal. Stephenson noted that no major surprises have surfaced in regulatory reviews, boosting confidence that the deal will go through.
Immediate boost to financials
Not only will Time Warner bring significant media assets to AT&T, it will also boost AT&T’s top line. As shown in the chart above, Time Warner generated $29.3 billion in revenue in 2016, up from $28.1 billion a year earlier. Time Warner is also a profitable business—it posted a net profit of more than $3.9 billion in 2016.
For AT&T, the acquisition of Time Warner should bolster its media business and help it offset weakness in its core phone carrier business, where it faces stiff competition from Verizon (VZ) and T-Mobile (TMUS).