AT&T Time warner inc deal $85 billion media tie-up mega deal agreement serials studios hbo channels cnn
(L) An AT&T logo and communication equipment is shown on a building in downtown Los Angeles, California October 29, 2014 and (R): The Time Warner building is pictured in New York, New York December 11, 2013. The $85-billion deal will enable AT&T to expand beyond wireless and Internet service into programming.Reuters file

AT&T, the communications and digital entertainment services, has signed an agreement to acquire media and entertainment conglomerate Time Warner Inc. in an $85-billion transaction. The acquisition will give the former access to Time Warner's portfolio of television channels and studios such as HBO, CNN, TNT and Warner Bros. Jeff Bewkes, Time Warner Chairman and CEO called it "a natural fit between two companies."

"AT&T Inc. and Time Warner Inc. today announced they have entered into a definitive agreement under which AT&T will acquire Time Warner in a stock-and-cash transaction valued at $107.50 per share. The agreement has been approved unanimously by the boards of directors of both companies," AT&T said in a statement on Saturday.

"It's a great fit, and it creates immediate and long-term value for our shareholders...This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers," Randall Stephenson, AT&T chairman and CEO, said.

"We'll have the world's best premium content with the networks to deliver it to every screen...we intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications," he added.

With HBO and CNN on one side of the company, and wireless on the other side, AT&T will have more power to shape the future of media, CNNMoney reported.

Time Warner said that the acquisition would bring in synergies and benefit customers in the long run.

"This is a great day for Time Warner and its shareholders. Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalize on the tremendous opportunities created by the growing demand for video content," Jeff Bewkes, Time Warner Chairman and CEO, said in the statement.

The AT&T-Time Warner deal could trigger a "new wave of consolidation" in the media and entertainment space, especially among 21st Century Fox and Disney, CNNMoney added.