AT&T has reached a deal to acquire Time Warner for more than $85 billion, a blockbuster deal that fuses a mobile giant with an entertainment conglomerate, carrying with it the potential to reshape the media landscape.

The two companies jointly announced the deal, unanimously approved by both boards, that will see the mobile company pay $107.50 per share in a cash and stock transaction.

The deal represents a marriage of Time Warner's limitless movie and television empire —including Harry Potter, Batman, Superman and the next generation of super hero movies being developed by DC Comics — with AT&T's wireless network, which covers 315 million people.



The deal, however, faces a stiff political and regulatory test. The populist winds buffeting Washington mean that legislators may not approve of another multi-billion corporate tie-up. Already, Republican presidential candidate Donald Trump said in a speech that under a potential GOP White House, his administration would not approve the deal.



Calling the deal a "perfect match," AT&T chief Randall Stephenson said the combined company would have "the world's best premium content with the networks to deliver it to every screen."

"It's a great fit, and it creates immediate and long-term value for our shareholders," Stephenson said. "We intend to give customers unmatched choice, quality, value and experiences that will define the future of media and communications."

The combination brings Time Warner full circle back to the heady days of the first Dotcom bubble, when it created a merger of equals with AOL—which failed spectacularly in achieving its goals and resulted in an eventual breakup.



The deal will pay off in the first year following the close of the transaction on a share and free cash flow basis, the companies said. AT&T expects to achieve $1 billion in savings within 3 years of the deal closing.

According to a report in The Wall Street Journal, Time Warner CEO Jeff Bewkes is expected to leave the firm after the interim period following the deal. Bewkes has served as Time Warner's CEO since 2008.

On Friday, Time Warner shares spiked nearly 8 percent to close at $89.48, while AT&T slumped 3 percent to finish the session at $37.49.



Earlier Saturday, AT&T told CNBC it has no comments on Trump's remarks.

AT&T's purchase of Time Warner includes small $500 million reverse break-up fee, in a sign of confidence it will pass anti-trust review.



Correction: AT&T's wireless network covers 315 million people. An earlier version misstated this fact.

— CNBC's David Faber contributed to this article.