AT&T Inc. has announced an agreement to buy Time Warner Inc. for $85.4 billion (78.4 billion euros) in a deal that should transform the telephone company into a media giant with production studios and a large library of popular content across its platforms. The agreement has the potential to reshape the media industry.

The Texas-based multinational telecommunications conglomerate has agreed to pay $107.50 a share for Time Warner, it said in a press release late Saturday. The deal is half cash and half stock.

AT&T Chief Executive Randall Stephenson will head the new company and Time Warner Chief Executive Jeff Bewkes, who has been in the post since 2008, will leave after an interim period following the deal, a person familiar with matter told the "Wall Street Journal."

Reviewing the deal

The company said that the US Department of Justice would review the deal and that the companies were determining which Federal Communications Commission licenses, if any, would  be transferred to AT&T in the deal.

"Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny," US Senator and member of the Senate Judiciary Committee Richard Blumenthal said after the deal was announced. 

AT&T is the second-largest provider of mobile telephone services and the largest provider of fixed telephone services in the US.

It also provides broadband subscription television services through DirecTV, which it bought in 2015 for $48.5 billion to become the nation's largest pay TV provider with more than 25 million customers.

DirecTV Now service is due to launch within months targeting the 20 million people in the US who don't have pay TV. The company has planned for it to be the primary TV platform by 2020, according to Bloomberg, allowing viewers to view a TV package over the internet without a cable box or satellite dish.

Telephones and movies

Time Warner owns HBO, CNN, TBS, TNT, Cartoon Network and Hollywood's biggest television and film studio, Warner Bros.

Its programming includes the Harry Potter film franchise, DC Comics, "The Big Bang Theory" and "Game of Thrones" and classic cartoon characters like Bugs Bunny.

It is made up of three divisions; Home Box Office Inc. (HBO), Turner Broadcasting System, Inc., and Warner Bros. The Turner unit has rights to basketball, baseball and e-sports.

Republican presidential candidate Donald Trump said in a speech on Saturday that, should he become president, his administration would not approve the deal because it would give AT&T "too much concentration of power."

"We'll look at breaking this deal up," Trump said.

It is unclear where Democratic nominee Hillary Clinton stands on the deal. Her website outlines plans to protect consumers by strengthening antitrust laws and enforcement in order to "promote competition" and "address excessive concentration" of power among corporations.

 AT&T had $147 billion in revenues in 2015 and Time Warner reported $28 billion.

jm/cmk (Reuters, AP)