AT&T Inc. is nearing an agreement to buy Time Warner Inc., a deal that would set a milestone in the converging media and telecommunications sectors and unleash a far-reaching reordering of the industry as rivals are spurred to attempt their own deals.

A deal, which could happen as early as this weekend, would unite AT&T’s wireless, broadband and satellite TV brands with Time Warner’s entertainment empire, which includes cable networks such as TNT, TBS, CNN, the prized HBO channel, and the Warner Bros. film and TV studio.

Talks toward a cash-and-stock purchase have come together quickly and could stall or fall through, said people familiar with the matter. The companies are negotiating a deal that would value Time Warner at between $105 and $110 a share, or more than $80 billion, people familiar with the discussions said.

It is possible other bidders could emerge, including traditional media conglomerates or technology companies. Apple Inc. approached Time Warner about a merger a few months ago and while those talks are no longer active, Apple continues to monitor the situation, a person familiar with the situation said. If a Time Warner sale occurs that could encourage other telecom and media companies to pursue their own combinations.

Time Warner shares rose 8% to $89.48 after The Wall Street Journal reported a deal could be imminent, while AT&T fell 3% to $37.49, both at 4 p.m. on Friday.

An AT&T-Time Warner merger would be the most ambitious marriage of content and distribution since Comcast Corp.’s 2011 purchase of NBCUniversal and would create a behemoth that rivals that cable giant. Its value potentially would stand as the biggest media deal in recent years: Time Warner has a market capitalization of $72 billion and AT&T’s is $226 billion.


A deal of its size would get intense regulatory scrutiny. U.S. regulatory officials have showed misgivings about conditions on the Comcast-NBCU deal—in particular, whether merger obligations on Comcast were enforceable—so it is unclear if they will be willing to bless another such merger.

AT&T Chief Executive Randall Stephenson and Time Warner CEO Jeff Bewkes struck up talks in recent weeks, with support from internal teams, the people familiar with the matter said. Veteran entertainment executive Peter Chernin, who has an online video joint venture with AT&T, has informally advised AT&T on its bid, one of the people said.

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A sale of Time Warner to AT&T would have echoes of the blockbuster 2000 AOL-Time Warner merger—then the largest deal of all time. That was a different bet on a converged media future, one in which AOL’s internet service would have complemented and boosted Time Warner’s content. But the merger ultimately proved a failure, hurt by the unraveling of the dot-com boom, a clash of cultures and poor assumptions about the way each business could help the other.

Dallas-based AT&T has been reshaping its strategy in recent years, as the U.S. cellular business became saturated and years of consolidation in that sector left no room for major deals. AT&T’s attempt to buy T-Mobile was killed by regulators in 2011.


AT&T has turned to video, with the nearly $50 billion acquisition of DirecTV last year, instantly making it the biggest player in pay television. That pay TV business faces headwinds as more consumers cut the cord or look to trim their monthly bills, with streaming services providing new competition in the marketplace.

Owning Time Warner’s content—including HBO’s “Game of Thrones” and professional sports games—could bring AT&T new growth and assets that would help its streaming media ambitions.

From left, Melina Matsoukas, Prentice Penny and Issa Rae participate in the ‘Insecure’ panel during the HBO Television Critics Association summer press tour July 30. HBO is one of Time Warner properties AT&T would take on if talks for AT&T to acquire Time Warner go through. Photo: Associated Press

With AT&T’s $117.3 billion in long-term debt at the end of June, a Time Warner deal could give the telecom company a balance sheet with debt hitting almost $200 billion, according to analysts at New Street Research.

Bloomberg reported on Thursday that senior executives of AT&T and Time Warner had met in recent weeks to hold preliminary discussions on various business strategies, including a possible merger.


Since the AOL-Time Warner deal, much has changed, and the mashup of mobile, broadband and TV that has long been anticipated has been taking shape quickly. Consumers are streaming shows on phones and tablets, signing up for TV services without a connection from a traditional cable or satellite provider, and doing much of their media consumption on social media platforms such as Facebook.

Time Warner’s Mr. Bewkes has positioned his company as a pure content player in recent years, spinning off AOL as well as the Time Warner Cable pay-TV unit and the Time Inc. magazine-publishing division.

In 2014, Mr. Bewkes fought off an unsolicited takeover bid from 21st Century Fox, indicating Time Warner wanted a far higher price than the initial roughly $80 billion offer that was on the table. (21st Century Fox and Wall Street Journal-owner News Corp share common ownership.)

Mr. Bewkes since has sought to persuade Wall Street he can run Time Warner effectively as a stand-alone outfit in a media world where a few distribution giants are achieving enormous scale.

To answer the concern that Netflix and other streaming services are appealing to cord-cutters and people who never sign up for cable in the first place, he launched the HBO Now streaming service, which had nearly a million subscribers as of March. Time Warner also carried out cost cuts and layoffs and continued big content investments.


Among media players, Time Warner is attractive because it doesn’t have a big shareholder with effective control and because it is relatively well-positioned for a media world where cable TV distributors want to carry skinnier bundles of channels.

Time Warner has only a few major networks—some of which, like TNT and TBS, carry high-value sports content—compared with companies that have a host of channels with small audiences.

Acquiring Time Warner also would get AT&T further into the streaming business with Hulu. Time Warner bought a 10% stake in Hulu in August, joining Walt Disney Co. , 21st Century Fox and NBCUniversal as an owner in the $5.8 billion video service. AT&T also is launching a DirecTV online service aimed at selling a robust package of TV channels.

—Shalini Ramachandran, Dennis K. Berman

and Dana Mattioli contributed to this article.

Write to Keach Hagey at keach.hagey@wsj.com, Amol Sharma at amol.sharma@wsj.com, Dana Cimilluca at dana.cimilluca@wsj.com and Thomas Gryta at thomas.gryta@wsj.com