AT&T completes acquisition of Time Warner

Well, they certainly wasted no time. Two days after a federal judge nixed the federal government’s objections to the deal, AT&T has completed its acquisition of Time Warner.

The final purchase prices was $42.5 billion in cash plus 1,185 million shares of AT&T’s common stock. AT&T now expects $1.5 billion in cost synergies by the end of year 3, as well as another $1 billion in revenue synergies.

AT&T CEO Randall Stephenson will lead the combined company, while John Donovan will lead the US communications side, John Stankey will lead the media business, Lori Lee will lead the international business, and Brian Lesser will head up the ad and analytics business. Time Warner’s now former CEO Jeff Bewkes will remain on for a transition period as a senior advisor.

The deal significantly reshapes the content and network markets, combining AT&T’s fixed and wireless network reach with the likes of Warner Bros, HBO, and CNN. Mixing content and distribution like this is of course the hot topic of the year, but there are dangers alongside the opportunities.

The communications side will have to keep the focus on network quality and investment even as the headlines go where they’ve been tending to lately, to the content side of things.

Attention will now shift to the next potential mega deals, with Comcast’s bid for Fox taking its turn in the spotlight. But I suspect the integration process at AT&T may be the key action to watch over the next few quarters.

There are a lot of synergies to achieve, and most of them involve finding a new balance between very different business cultures. It’s one thing to say that the federal government shouldn’t stand in the way, and an entirely different thing to prove that the whole shebang was a good idea in the first place.