Time Warner Inc. reached agreement Friday to buy Ted Turner's cable television empire, maintaining Time Warner's ranking as the world's biggest media and entertainment company.
Time agreed to swap newly issued stock valued at about $7.5 billion for all of Atlanta-based Turner Broadcasting System Inc.'s shares, the companies announced. That is down from an estimated $8 billion when the talks first were disclosed Aug. 30, reflecting a decline in the value of Time Warner stock since then.Time Warner gets cable TV treasures like Cable News Network and the Cartoon Network in the deal, while adding the industry's charismatic pioneer as a major shareholder and vice chairman of the combined company.
Time Warner Chairman Gerald Levin is hoping the deal will provide new ways for his publishing, music and filmed entertainment combine, known for Time magazine, Madonna, HBO and the "Batman" movies, to grow and compete for talent and customers around the world.
The deal was approved Friday in meeting of both companies' boards following marathon sessions on Thursday. It still requires approval from regulators and shareholders.
Under terms of the deal, Time Warner will pay 0.75 of a share of newly issued Time Warner stock for each of Turner's Class A and B shares. Owners of Class C shares of Turner stock, including Malone's TCI, will get a slightly larger 0.8 of a share of Time Warner stock for each of those shares.
TCI will also get extended agreements to carry Turner cable networks as part of the deal as well the right to buy TBS's interest in SportsSouth, a regional sports cable network.