AT&T to announce acquisition of Time Warner for $85 billion: report

AT&T Inc has in-principle agreed to buy Time Warner Inc for about $85 billion, in what could be the year's biggest deal, sources said on Friday, paving the way for what would be the biggest deal in the world this year and give the telecom company control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.

The deal, which has been agreed on most terms, could be announced as early as Sunday, say reports.

The move is part of the developments in the sector as telecommunications companies look to combine content and distribution to capture customers replacing traditional pay-TV packages with more streamlined offerings and online delivery.

AT&T, which sells wireless phone and broadband services, bought satellite TV provider DirecTV last year for $48.5 billion and with Time Warner in hand, it hopes to emerge a media powerhouse.

AT7T had in 2014 entered a joint venture, Otter Media, with the Chernin Group to invest in media businesses, and has rolled out video streaming services.

Time Warner, with assets including the HBO, CNN, TBS and TNT, is a major presence in the movies, TV and video games segment. It also owns the Warner Bros film studio, producer of the ''Batman'' and ''Harry Potter'' film franchises. The company also owns a 10 per cent stake in video streaming site Hulu.

Time Warner chief executive Jeff Bewkes had rejected an $80 billion offer from Twenty-First Century Fox Inc in 2014, but sources said that it has no plans to renew its bid.

The Wall Street Journal reported on Friday that Apple Inc had approached Time Warner a few months ago about a possible merger.

Owning more content gives cable and telecom companies bargaining leverage, especially as the new mobile technology including next-generation 5G networks could make a content tie-up attractive for wireless providers.

Dallas-based AT&T and New York-based Time Warner declined to comment.