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Examining the logic behind AT&T buying Time Warner

| Nov 4, 2016 | Mergers & Acquisitions

 

By now, many of our readers in Louisiana have heard the biggest business news in years: mega-communications company AT&T has made a bid to purchase entertainment company Time Warner for $85 billion. The acquisition would bring two huge companies together — companies that provide a vast variety of services to millions of Americans throughout the country.

However, some experts are asking whether or not the acquisition, if approved, makes sense. Some believe that both companies may be facing some tough times in the future, as consumer preferences change and the way we consume information and entertainment morphs with changes in technology. However, it appears that the leaders of these two companies believe that, together, they can overcome the challenges they may be facing.

For some, the argument in favor of the acquisition is based on the strength of each company. AT&T delivers entertainment, and Time Warner has assets that generate and manage entertainment content. By combining the two companies, there may be a much more streamlined process for getting their products to the American consumer.

The proposed acquisition of Time Warner by AT&T still faces some hurdles, as it has dusted up some political opinions from all points of the spectrum. However, when businesses believe that buying a company is the best way to expand, adapt or become more aggressive, they will do everything they can to make sure that the transaction is a success. Companies in Louisiana with similar thinking will want to make sure they do their due diligence in exploring acquisition options.

Source: npr.org, “Does The AT&T-Time Warner Merger Make Sense?,” David Folkenflik, Oct. 28, 2016

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