AT&T Inc has announced it has agreed to buy Time Warner Inc for $85.4 billion (€78.5bn), in the most significant move yet by a telecommunications company to acquire content to stream over its network to attract a growing number of online viewers.
The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.
The tie-up will likely face intense scrutiny by US antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.
AT&T will pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall, according to a company statement.
AT&T said it expected to close the deal by the end of 2017.
Dallas-based AT&T said 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.
US politicians were already worried about cable company Comcast Corp's $30bn acquisition of NBC Universal, and several argued for close regulatory scrutiny of the AT&T deal.
"Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny," said US Senator Richard Blumenthal, Senate Judiciary Committee member and former attorney general of Connecticut.
"I will be looking closely at what this merger means for consumers and their pocketbooks."
US Republican presidential nominee Donald Trump said at a rally he would block any AT&T-Time Warner deal if he wins the election.
Mr Trump has complained about media coverage of his campaign, especially by Time Warner's CNN.
"It's too much concentration of power in the hands of too few," said Mr Trump.
Representatives of his Democratic rival, Hillary Clinton, did not immediately respond to a request for comment.
AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse.
It bought satellite TV provider DirecTV last year for $48.5 billion.
It had about 142 million North American wireless subscribers as of 30 June, and about 38 million video subscribers through DirecTV and its U-verse service.
New York-based Time Warner is a major force in movies, TV and video games.
Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the "Batman" and "Harry Potter" film franchises.
The company also owns a 10% stake in video streaming site Hulu. The HBO network alone has more than 130 million subscribers.
AT&T Chief Executive Officer Randall Stephenson told reporters on a conference call that owning Time Warner and all its content will provide a greater competitive advantage than just continuing to license it.
Time Warner must pay AT&T $1.725bn if it finds a different buyer.
If regulators block the deal, AT&T must pay Time Warner $500m, according to people familiar with the deal.
The telecom and media sectors have been consolidating. In addition to Comcast's purchase of NBC Universal, AT&T's wireless rival Verizon Communications Inc is in the process of buying internet company Yahoo Inc for about $4.8bn.
