AT&T has reached a deal to buy Time Warner in a multi-billion dollar sale that will make AT&T a media and communications giant. The deal, if allowed to proceed by regulators, will create a massive media conglomerate that will rival the Comcast/NBC Universal merger last year.

Executives of AT&T and Time Warner have been in talks for months, fueling a great deal of speculation on whether or not a final agreement would be made and what form that agreement would take. Two years ago, Time Warner Cable and their CEO, Jeff Bewkes, eventually refused a buyout offer from 21st Century Fox, a decision that was controversial at the time in financial circles and within both companies. However, Mr. Bewkes is likely vindicated by his decision to wait, as the current AT&T offer is far higher than the $85 a share sale price offered by 21st Century Fox.

Telephone Giant AT&T To Buy Time Warner Cable [Image by Eric Gay/AP Images]

The AT&T Time Warner offer amounts to some $86 billion, half of which will be paid in cash and half of which will be paid in stock. This amounts to about $107.50 a share, according to the Wall Street Journal. This far exceeds the amount that Comcast paid for their 51 percent stake in NBC Universal. AT&T Chief Executive Randall Stephenson will chair the new, combined company, while Mr. Bewkes of Time Warner will remain in an executive position for a period of time after the deal is completed to aid in the transition before finally leaving the company.

The AT&T and Time Warner merger will unite two already massive corporations which are incredibly powerful and influential. The two companies are also so ubiquitous that their names are part of the everyday American lexicon.

AT&T can trace its roots back to 1885 and the founding of the original American Telephone and Telegraph Company. Today, AT&T is said to be the 23rd largest company in the world and the largest, by revenue, telecommunications company. Though they are the largest provider of landline telephone service in the United States, much of their business is in providing mobile phone service; they are the second largest provider of such service in the U.S. AT&T has also branched out into broadband subscription television service in the past years with their acquisition of DirecTV.

Time Warner is a major media conglomerate, third in the world in terms of television and entertainment assets, and is also the second largest provider of internet service in the United States behind only their rival Comcast. The company also owns some of the most recognizable brands in media, including HBO, CNN, TBS, New Line Cinema, and of course the Warner Bros. family of film studios and companies. Time Warner also owns a 10 percent stake in online streaming service Hulu, a sign that the company is attempting to branch into the rapidly growing internet television market which has cut into the profit margin of their traditional cable service.

Time Warner Cable At The New York Stock Exchange [Image by Richard Drew/AP Images]

In the words of CNN Money, itself owned by Time Warner, the AT&T Time Warner merger will create “a union of programming and distribution.” The resulting company will create an entity that will own a large portion of the media and the means to spread the message of that media to an ever-increasing audience. The acquisition gives AT&T a vastly more diverse business model, one that is not solely reliant on telecommunications.

Federal regulators will have to sign off on the AT&T Time Warner deal, a process that could take up to a year. Various agencies will be evaluating whether or not the merger will violate federal monopoly laws, for example, and if the resulting conglomerate will be a good thing for consumers. That detail is, at this point, an open question.

Regulators were highly skeptical of the Comcast NBC Universal deal previously, and many feel that more restrictions should have been put in place. How that attitude will affect the process, and how the current election cycle will influence the federal decision, is unclear. Donald Trump, for his part, has stated that he opposes the merger. The Clinton campaign has not commented.

[Featured Image by Mark Lennihan/AP Images]